The Supplemental Nutrition Assistance Program (formerly known as food stamps) dates back to 1939.
After several iterations, the program evolved into what is now known as the Electronic Benefits Transfer (EBT) system – the first pilot began in 1984.
Widely used throughout the US, it is reported that, as of April 2023, 12.5% of the total US population received food stamps. But people receiving food stamps can’t spend their funds anywhere – the retailer needs to be part of the Electronic Benefits Transfer (EBT) system.
If you are a retailer of “staple foods” like fruits, vegetables, meat, and bread, or “accessory foods” like snacks, seasonings, sodas and sweets, your business can help people who rely on food stamps by accepting EBT payments.
If you’re considering EBT for your business, this “beginners guide” should help you get started!
What is Electronic Benefits Transfer (EBT)?
Electronic Benefits Transfer (EBT) allows recipients of government assistance to access the funds and make purchases with an EBT card. These funds go towards buying “staple foods” for the household, like fruits and vegetables, meat, poultry, fish, breads, cereals, and more.
Individuals who are eligible for government assistance programs receive an EBT card which the government distributes funds to. Just like a debit card, the card has a magnetic stripe and requires a Personal Identification Number (PIN) to make payments.
Why should your business accept EBT?
Do good and grow your business.
- Supports the community. Accepting EBT promotes inclusivity and ensures that all members of the community can purchase essential items at your store – including those who rely on SNAP benefits.
- Broader customer base. Accepting EBT card payments can increase your customer base – especially in areas with a lot of SNAP recipients.
- Lower transaction fees. The processing fees for EBT transactions are lower than credit card transaction fees. In fact, there is no interchange fee for these.
- Potential government incentives. In some cases, there are incentives or programs that encourage businesses to accept EBT – especially in underserved areas.
How Much Does EBT Processing Cost?
EBT payments are cheaper to process than credit card payments.
While payment processors can still charge a small fee per EBT transaction, there are no interchange fees for this payment method – which make up the largest percentage of the credit card processing fees.
As part of our credit card pricing structure at Gravity, we offer a flat fee of 2.5% + $0.10 per card-present transaction (alongside our standard customized “cost plus” rates). Since this fee typically covers interchange rates, the fee is much lower for EBT payment processing (0% + 10¢ a transaction).
We can also create a customized pricing plan for your business. Please see our payment processing rates for more information.
How to Accept EBT at Your Business
To accept EBT payments, you need to obtain a permit from the US Food and Nutrition Service (FNS).
The application process requires some documentation, but it is straightforward. Before you apply, consider the following:
Is your business qualified to accept EBT payments?
Your business needs to meet some requirements to qualify to accept EBT payments. You must either exclusively sell staple foods such as vegetables, fruits, dairy, meats, or cereals, or more than 50% of your total gross retail sales must come from such staple foods.
Grocery stores, farmer’s markets, and other businesses that primarily sell staple foods are the businesses that most commonly qualify for accepting EBT payments.
Find more information about the requirements on the FHS website here.
Does your payment processor facilitate EBT payments?
Not all payment processors can process EBT payments, but you can with Gravity.
Are your credit card terminals compatible?
Most modern credit card terminals available in the US can accept EBT payments, but some of the older models can’t.
Several of the point of sale systems and credit card terminals we work with at Gravity Payments can be used as an EBT card reader, like the FD150 and all of our Clover devices such as the Clover Flex and the Clover Station Duo.
Is your business qualified and do you work with a payment processor and payment hardware that can process EBT payments? Great! Head over to the FNS website to apply.
Accept EBT Payments with Gravity Payments
Gravity Payments can facilitate all of the payment methods you want to offer in your business – including EBT payments.
Frequently Asked Questions
Here are some questions we often get asked about EBT payments.
Can I accept EBT payments online?
Yes, you can – in most cases. See the SNAP Online Purchasing Pilot Program for more information.
Do all foods fall under the SNAP program?
No, the program is specifically for SNAP-approved foods – which are staple foods. Hot food, restaurant food, alcohol, and pet food do not fall under the program.
Can I provide cashback or cash refunds for EBT payments?
No, cashback and cash refunds are not allowed.