USDA proposes adding chip and tap-to-pay tech to EBT cards

The USDA is pushing for a major security upgrade to Electronic Benefit Transfer (EBT) cards, proposing a shift from outdated magnetic stripes to chip and tap-to-pay technology. For retailers participating in SNAP, this is a double-edged sword. On one hand, it addresses the massive surge in 'skimming' fraud that has plagued the program. On the other hand, it requires merchants to ensure their point-of-sale (POS) systems are fully compatible with these new standards. The National Grocers Association is backing the move but remains cautious about the costs of implementation for smaller operators. If you accept SNAP, this means you will soon see a decrease in disputed transactions and fraud-related headaches at the register. However, you need to audit your current hardware. While most modern EMV-ready terminals can handle chip EBT, the transition will require software updates and potentially new hardware for those still relying on older swipe-only setups. This regulation aims to bring EBT security in line with standard credit and debit cards, reducing the friction and security risks currently associated with government benefit payments. The USDA is also looking into mobile wallet integration, which could eventually allow customers to pay with SNAP benefits via their smartphones.

Source: Payments Dive

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