What is EBT/SNAP Credit Card Processing?
If you work in and/or around the B2C food industry, you’re probably familiar with EBT or customers asking you if you support SNAP program payments.
EBT stands for electronic-benefit-transfer, and it’s the government’s transaction method for what most of us know as food stamps. Physical stamps were used for financial assistance up until the 1990’s, at which point the program was officially renamed the Supplemental Nutrition Assistance Program, or SNAP for short.
Depending on a citizen’s needs, the government sends a pre-loaded debit card to eligible recipients — like a gift card of sorts. Once the citizen receives the card, they are able to use it at any eligible SNAP location, but only on certain categories of items. EBT is most often used at grocery stores, but depending on the state, fast food, farmers markets, bakeries, and more can accept EBT transactions.
While it varies slightly from state to state, EBT transactions can never be used to purchase:
- Pet food
- Paper products
- Household Supplies
Basically anything other than responsible food purchases are banned. That doesn’t mean your business can’t offer these other items, but if customers wish to purchase them they will have to do two separate transactions. Most SNAP recipients are aware of these rules, as an attempt to purchase an illegal product with SNAP has official repercussions.
If you’re curious about what types of products are SNAP eligible, head to your state government’s website.
Benefits & costs of supporting EBT transactions
- You can better serve your customers’ needs by supporting families on SNAP.
- You’ll help your community by providing additional options for SNAP recipients.
- You’ll sell more goods and products by supporting an extra payment type.
- Since EBT is a governmental transaction method, processors cannot charge interchange fees, meaning it’s usually much cheaper for merchants than traditional credit card transactions and should be about the same rate as pin-debit transaction. Contact your merchant processor for a specific quote on EBT transactions.
- It’s illegal to charge sales tax on EBT transactions, but the money you save from the lack of interchange fees should help balance this out.
How to support EBT transactions
If you’re interested in supporting EBT transactions, it’s pretty easy for businesses with existing payment systems.
Step 1: Register to support EBT transactions on the Food and Nutrition Service FNS website.
Depending on how many stores you own and of what type, you’ll either be directed to the MSO (multiple store owners) page, be asked to call SNAP directly, or start a short online application. Once you complete the application and submit all supported documents, it typically takes 1-3 months to get approved.
Step 2: Send your official 7-digit SNAP number to your merchant processor.
This number, also known as your FNS number, will be delivered if and when your application is approved. Once you get your number, send an email to your merchant processor and let them know you want to accept EBT transactions along with your SNAP number. They’ll send you any additional steps according to their unique process, if need be.
Step 3: Make sure your terminal(s) accept PIN-Debit transactions.
If you already support debit card payments with PIN entry, you are all set! If not, you’ll have to look at updating your terminal(s).
Step 4: Say yes the next time a customer asks if you accept SNAP!