---
title: "California EFT law BPC § 25509: what it means in 2026"
description: "California's AB 2991, effective January 1, 2026, updates Business and Professions Code §§ 25509 and 25509.1 to require wholesalers to initiate electronic funds transfers from retailers' accounts for alcoholic beverages by the 30th day after delivery. It also mandates 1% late fees starting on day 43 (with additional fees every 30 days) and prepayment for delinquent accounts to preserve tied-house restrictions."
url: https://www.paidnice.com/blog/california-eft-law-bpc-25509
---

# New California EFT law: Understanding BPC § 25509 in 2026 and Staying Compliant

Written by

Denym Bird
Expert verified

Co-founder & CEO of Paidnice

Denym summarized California's AB 2991 and Business and Professions Code section 25509, covering electronic funds transfer by day 30, 1% late fees from day 43, and what it means for wholesalers.

Reviewed by Jack Daffron

Co-founder of Paidnice

Updated Sep 28, 2026 · 4 min

## Summary

California Business and Professions Code sections 25509 and 25509.1 require a retailer to pay an alcohol wholesaler by electronic funds transfer, initiated by the wholesaler, within 30 days of delivery, for deliveries on or after January 1, 2026. A retailer still unpaid on day 42 owes a mandatory 1% late fee on day 43 and 1% every 30 days after.

- **Delinquency:** An account not paid in full by day 30, or with a late fee still unpaid 30 days after it was charged, must be sold to on a prepaid basis until it is current.
- **Scope:** The rules cover beer, wine, and distilled spirits sold by licensed wholesalers to retail licensees; payments for anything else stay on ordinary commercial terms.
- **The source:** The statute text is on leginfo.legislature.ca.gov, and the Department of Alcoholic Beverage Control's AB 2991 guidance page explains the EFT rules.

## Is this law only for alcoholic beverages?

Yes. [Business and Professions Code sections 25509 and 25509.1](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=25509) apply only to sales of beer, wine, and distilled spirits from a licensed wholesaler, manufacturer, or importer to a retail licensee, on-sale or off-sale.

The sections sit in Division 9 of the Business and Professions Code (Alcoholic Beverages), Chapter 15 (Tied-House Restrictions). A payment for non-alcohol products, even from the same wholesaler to the same retailer, stays on ordinary commercial credit terms and carries none of the EFT rules or delinquency penalties.
Free: Payment reminder email templatesCopy the reminder emails for before, on and after the due date.

## What does section 25509 say about late fees and delinquency?

Section 25509 makes a 1% [late fee](https://www.paidnice.com/late-fees) mandatory: if a retailer has not paid in full by the 42nd day after delivery, the wholesaler must charge 1% of the unpaid balance on day 43, and a further 1% for each 30 days the balance stays unpaid. Payment itself is due within 30 days of delivery.

- The 30-day and 42-day periods start on the day after the invoice date; if the last day falls on a weekend or holiday, the next business day counts as the deadline.
- If full payment is not received by day 30, or a late fee is not paid within 30 days of its due date, the wholesaler must sell to that retailer on a prepaid basis until the account is current.
- Money received from a retailer is applied to the oldest balance first.
- A check must be deposited for collection no later than the second business day after receipt.

On a $10,000 delivery still unpaid on day 43, the fee is $100, another $100 on day 73, and $100 every 30 days after that, on top of the move to prepaid terms.

Whether that rate should compound is covered in [compound or simple interest](https://www.paidnice.com/blog/compound-interest-on-overdue-invoices), and you can work out what a specific invoice is owed with our [free late fee calculator](https://www.paidnice.com/blog/free-late-fee-calculator).

![Alcohol delivery timeline: EFT by the wholesaler day 30, 1 percent late fee day 43, 1 percent again every 30 days from day 73](https://www.paidnice.com/images/blog/california-eft-law-bpc-25509-card.png)

## What does section 25509.1 require for electronic payment?

Section 25509.1 requires payment for deliveries on or after January 1, 2026 to be made by electronic funds transfer that the [wholesaler initiates](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=25509.1) as a withdrawal from the retailer's bank account, occurring no later than the 30th day after delivery.

- Each party pays the electronic payment costs it incurs; a wholesaler cannot cover a retailer's fees, and a retailer cannot cover a wholesaler's.
- The wholesaler selects the third-party processor unless the parties agree otherwise; a retailer that already had a processor on July 1, 2025 keeps it by default.
- Cash, check, or money order is still allowed after an EFT fails for insufficient funds, during a processor outage, under an interim or temporary permit, and for the first 30 days after a license is issued.
- A wholesaler may accept a credit card instead, with the retailer bearing the cost of the transaction.

## What does this mean for wholesalers and retailers?

The biggest operational change is the mandatory EFT pull: the wholesaler, not the retailer, now initiates every payment, so every retail account needs a banking authorization on file before its first 2026 delivery reaches day 30.

For **retailers**, that means strict 30-day terms, a fee that repeats every 30 days once an account is late, and keeping enough in the account for the pull to clear, since a failed transfer reverts the account to cash or check.

## What mistakes cost wholesalers when they apply section 25509?

- **Selling the next delivery on credit after day 30.** [Section 25509](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=25509) calls for payment in advance of delivery once a retailer has not paid in full by day 30. A second $10,000 delivery on credit, on top of an unpaid $10,000, leaves $20,000 unpaid. *Fix: move the account to prepay on day 31.*
- **Applying a payment to the newest invoice.** With two unpaid $10,000 invoices, a $10,000 payment put on the newer one leaves the older one adding $100 every 30 days. *Fix: apply every payment to the oldest invoice, as above.*
- **Counting business days.** The periods run in calendar days, including Sundays and holidays. 30 business days is 6 weeks, or 42 calendar days, so the prepay step comes 12 days late. *Fix: count calendar days from the day after the invoice date, and move only a last day that falls on a weekend or holiday.*

## Where is the official source for this law?

The official source is the California Department of Alcoholic Beverage Control's page [AB 2991 Guidance: Electronic Payments Between Retailers and Wholesalers](https://www.abc.ca.gov/ab-2991-guidance-electronic-payments-between-retailers-and-wholesalers/), which covers the EFT mandate, the 30-day deadline, the cost rule, the exceptions, and credit cards. The 1% late fee and prepayment rules are in the statute itself, Business and Professions Code section 25509, on leginfo.legislature.ca.gov. AB 2991 was chaptered in 2024, took effect on January 1, 2025, and became operative on January 1, 2026.

## How Paidnice helps you comply

Paidnice is accounts receivable automation for [Xero](https://www.paidnice.com/xero) and [QuickBooks Online](https://www.paidnice.com/quickbooks) that applies the section 25509 schedule for you: a percentage of the unpaid balance after a grace period you set, repeated monthly, added to the ledger as a line item on the invoice or as a separate penalty invoice.

- **Late fee rules**: set the percentage, the number of days overdue before it applies, and the monthly repeat; compounding is a toggle, on by default.
- **Reminders and portal**: timed reminders can name the fee before it lands, and the retailer pays by card, ACH, or bank debit through Stripe in the customer portal.
- **Escalations**: a credit-limit breach can trigger an escalation to your sales team, so the account moves to prepay before the next delivery.

The wholesaler-initiated EFT pull happens in your payment processor; Paidnice handles the reminders, fees, statements, and portal alongside it. Customers see half as many late invoices in the first 30 days.

*This post is for informational purposes only and not legal advice. Consult your attorney or the California Department of Alcoholic Beverage Control for specific guidance.*

## Paidnice features in this article

- [**Late fees and interest** Adds late fees and interest to overdue invoices when you turn them on.](https://www.paidnice.com/late-fees)

## About the editorial team

Written by Denym Bird Co-founder & CEO of Paidnice

Denym started Paidnice in 2022 after customers paying late left his own business short on payroll. He has led it to $1 billion collected on time across more than 1 million invoices, and writes about credit control, late fees and getting paid on Xero and QuickBooks.

Reviewed by Jack Daffron Co-founder of Paidnice

Jack is a co-founder of Paidnice and has built accounting software for more than 10 years. He builds the product that sends reminders, adds late fees and takes payments for businesses on Xero, QuickBooks and ERPs such as NetSuite and Business Central.

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