Did You Know?
In many states, Electronic Benefit Transfer or EBTThe electronic transfer of insurance, food program or state benefits. cards are the primary source for government-issued benefits, such as food stamps. In fact, more than 85% of food stamp benefits that are issued today are issued on EBTThe electronic transfer of insurance, food program or state benefits. cards. Many experts predict that other benefits such as social security will also be issued on EBTThe electronic transfer of insurance, food program or state benefits. cards in the future, which will eventually require more merchants to accept the government-issued card.
As EBTThe electronic transfer of insurance, food program or state benefits. becomes a more frequent form of payment, your business should be fully prepared. Expand your customer base by enrolling in our EBTThe electronic transfer of insurance, food program or state benefits. program to accept those cards today!
How EBT Works
Government programs such as state-issued food stamps, Women/ Infants/ Children (WIC), and Temporary Assistance to Needy Families (TANF), issue benefits on an electronic card known as an EBTThe electronic transfer of insurance, food program or state benefits. card.
The card is similar to a debit card, as the cardholder has a specific personal identification number (PIN)Personal Identification Number used by a cardholder to authenticate card ownership for ATM or debit card transactions. The cardholder enters his/her PIN into a PIN pad. The PIN is required to complete an ATM/debit card transaction. that must be used when accessing their available funds.
To process an EBTThe electronic transfer of insurance, food program or state benefits. card, the card is run through an electronic payment system that authorizes the transfer of the card holder’s government benefits to the retailer (such as a grocery store, etc.).
EBT FAQs
Is EBTThe electronic transfer of insurance, food program or state benefits. new technology?
EBTThe electronic transfer of insurance, food program or state benefits. systems using magnetic stripeA stripe on the back of a credit card that contains magnetically encoded cardholder information. The name of the cardholder is stored on Track I. The account number and expiration data are stored on Track II. technology for on-line authorizations use the same electronic funds transfer technology that many grocery stores use for their “debit card” payment systems. EBTThe electronic transfer of insurance, food program or state benefits. is a special application of electronic funds transfer (EFT)Electronic Funds Transfer is the transfer of funds from one bank account to another bank account utilizing the ACH Network. technology, which takes money directly from one account and transfers it to another. (Credit cards, by comparison, simply record a sale for payment later.) EFTElectronic Funds Transfer is the transfer of funds from one bank account to another bank account utilizing the ACH Network. became familiar to most people in the early 1980s when banks began using automatic teller machines. Since then, EFTElectronic Funds Transfer is the transfer of funds from one bank account to another bank account utilizing the ACH Network. has found increasing use in the private sector. Smart cardA plastic card with an embedded microchip that can be loaded with data and used for telephone calling, electronic cash payments, or other applications. technology for off-line authorizations is used for many applications in Europe, but is not common in the United States. Legislative changes to the Food Stamp Act in August 1996 allowed states to choose any technology for their EBTThe electronic transfer of insurance, food program or state benefits. systems as long as the system remains cost neutral and meets other standards.
What are the benefits of EBTThe electronic transfer of insurance, food program or state benefits.?
EBTThe electronic transfer of insurance, food program or state benefits. eliminates the cumbersome processes required by the paper food stamp system. In 1997, the Food Stamp Program issued almost $20 billion worth of benefits. In a single month, retailers made 1.7 million deposits of food stamp coupons in more than 26,000 banks. Banks in turn made almost 27,000 deposits in Federal Reserve District Banks. Coupons are counted at each step, making the accounting enormously complex and labor intensive.
EBTThe electronic transfer of insurance, food program or state benefits. eliminates much of the paper handling involved in the food stamp system, and automates the accounting process. By eliminating paper coupons that may be lost, sold or stolen, EBTThe electronic transfer of insurance, food program or state benefits. may help cut back on food stamp fraud. EBTThe electronic transfer of insurance, food program or state benefits. creates an electronic record of each food stamp transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account...., making it easier to identify and document instances where food stamps are “trafficked,” or exchanged for cash, drugs, or other illegal goods.
Recipients like the convenience and security of EBTThe electronic transfer of insurance, food program or state benefits.. They can draw their benefits as needed instead of receiving a month’s allotment at one time. If the card is lost or stolen, it can’t be used by anyone who doesn’t know the PINPersonal Identification Number used by a cardholder to authenticate card ownership for ATM or debit card transactions. The cardholder enters his/her PIN into a PIN pad. The PIN is required to complete an ATM/debit card transaction., and it can be easily canceled and replaced. Surveys have shown that most participants prefer an EBTThe electronic transfer of insurance, food program or state benefits. system to the paper coupon system it replaced. Many recipients have said that EBTThe electronic transfer of insurance, food program or state benefits. reduces the stigma associated with food stamp coupon use.
Retailers and bankers like EBTThe electronic transfer of insurance, food program or state benefits. because it offers simplicity of accounting and reduces labor costs because there are no coupons to sort, count, and bundle. All the accounting is done automatically. The federal government saves time and money by moving to EBTThe electronic transfer of insurance, food program or state benefits.. The process of printing, transporting, safeguarding, distributing, accounting, and destroying the food stamp coupons is eliminated.
What’s the cost of EBTThe electronic transfer of insurance, food program or state benefits.?
Initially, EBTThe electronic transfer of insurance, food program or state benefits. systems were more expensive to operate than conventional food stamp issuance systems. EBTThe electronic transfer of insurance, food program or state benefits. reached a milestone in June of 1993, when evaluations in New Mexico and Minnesota showed that both cost less than the estimated cost of paper coupons in the same time period. Costs were also reduced for retailers, recipients and financial institutions. EBTThe electronic transfer of insurance, food program or state benefits./EFT costs are expected to continue to diminish as the technology becomes more widely used, and states implementing new systems are required to operate on a “cost neutral” basis, meaning that EBTThe electronic transfer of insurance, food program or state benefits. systems should cost no more to operate than the paper coupon system.
The federal government shares Food Stamp Program operating costs with the states, including the costs of EBTThe electronic transfer of insurance, food program or state benefits. up to the cost of conventional coupon issuance systems.
What’s the current state of EBTThe electronic transfer of insurance, food program or state benefits.?
All states are using EBTThe electronic transfer of insurance, food program or state benefits. as an alternative for food stamp issuance and, in some cases, for other programs such as WIC and the TANF program, the federal block-grant program operated by the Department of Health and Human Services. As of July 2004, all 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam were operating state-wide, city-wide, and territory-wide EBTThe electronic transfer of insurance, food program or state benefits. systems to issue food stamp benefits.
What does the future hold for EBTThe electronic transfer of insurance, food program or state benefits.?
The USDA continues to work with states to improve EBTThe electronic transfer of insurance, food program or state benefits. by assuring that stores are entered into, or taken out of, EBTThe electronic transfer of insurance, food program or state benefits. systems timely and correctly as well as using EBTThe electronic transfer of insurance, food program or state benefits. data efficiently to detect potential abuse.