Complete Guide On EBT Payment Processing

Why Use EBT?

EBT- Electronic Benefit Transfer is a payment system that is crafted to enable receivers assistance under TANF-Temporary Assistance To Needy Families, SNAP- Supplemental Nutrition Assistance Program or any other aid programs that are sponsored and supported by the state and the federal governments to make the required necessary goods and food purchases. The EBT allows recipients to use a secure and convenient magstripe by replacing the old food stamps through magstripe cards that are similar to a debit card with a PIN code to make purchases.

Become an EBT Retailer

Become an EBT Retailer!

Being an EBT retailer will open a whole new audience of untapped customers for you and boost your business to a new horizon. When you are an official EBT payment processing retailer, you gain an edge over your competitors who don’t have the same benefits as you do. Still, many companies aren’t an EBT retailer or accepting SNAP benefits just yet, as there are tons of questions and concerns surrounding the system due to lack of awareness.

Are you facing the same issue? Continue reading below to have that sorted out.

How to Become an EBT Retailer?

How to Become an EBT Retailer?

Majority grocery stores, small stores and farmers’ markets need to apply for a SNAP permit to accept EBT card payments with USDA FNS. You need to sell staple food in four major categories or have at least 50% of your net retail sales from one or more staple food options. This is mandatory if you want to receive a permit for EBT Payment Processing.

For business owners, accepting EBT payment processing will allow you to expand your customer base massively, plus the processing costs and expenses for EBT transactions are much lower than they are for credit and debit cards.

However, there is lengthy paperwork involved and you will need a system ready to accept these payments from different customers across the country, which applies to grocery stores, convenience stores, gas stations, farmers’ markets and some restaurants. This payment mechanism also allows authorized retail purchases to TANF recipients. If you’re a traditional retail merchant, adding EBT payment processing to your merchant account will support customers who also use this payment method.

However, in this article, we will explain the process of becoming an authorized EBT retailer along with all the requirements that are necessary before you can accept EBT payments. We will also discuss the costs and expenses attached to EBT payment processing and how they are different from the regular credit and debit card payments.


SNAP Benefits and EBT Card processing

Earlier on, users used paper coupons to utilize their SNAP benefits, but now they can use a plastic EBT card that functions like a debit card. The EBT card not only includes cash but also SNAP benefits. Cash benefits can be used for housing assistance and unemployment.  Each time a person uses their EBT card, the amount is automatically subtracted from their account and added to the business account. You should have the money deposited in your account within two working days.  This will give you a more discreet payment option and will also benefit your store if you have EBT card processing.


Mandatory Requirements For EBT Payment Processing

Mandatory Requirements For EBT Payment Processing

Just like any other government-financed program, EBT payment processing also requires a detailed share of legal documents and bureaucratic intervention before you can start accepting EBT payments for your business. However, once the registrations process is over, it’s a smooth process that doesn’t require much hassle. You can even fulfill most requirements online.

The SNAP program is managed and run by the US Department of Agriculture’s Food and Nutrition Service. Hence the first thing you will be needing is a permit. You can either opt for an FNS permit or SNAP permit. These permits are given to all the qualified business owners who meet the criteria for appropriate statuary criteria and submit the application with all the supporting documents. To be a qualified business for a SNAP permit, you need to fulfill the following criteria:

Your business should fall into the following categories:

  • Meat, fish and poultry.
  • Breads, cereals, grains.
  • Dairy
  • Fruits and vegetables

If you are a qualified business owner, then you have an easy road ahead. Simply go to the FNS website and you can start your journey. However, before you can submit your application, you will need to establish an eAuthentication Account with the FNS that verifies your identity. This process can be completed in just a little while to get your EBT Card.

Once you have your eAuthentication Account, you will have to submit supporting documents along with the application. After your eAuthentication is verified and approved, you will get one month to further complete and submit the application with the required documents. The application itself is short and can be finished in just 15 minutes but the documentation can take a while for which you will need to dig deeper to get very specific answers. You will need supporting documents in the following categories:

  • A copy of your ID card, passport and driver’s license.
  • A copy of your social security card, this includes officers, all owners, shareholders and their spouses.
  • A copy of your current business license.
  • Your merchants account providers detail and information, their address, phone number, business address, website, email address.
  • Your bank’s name and address, their contact information.


All this above-mentioned information can be uploaded online or you can print it and mail it to FNS. In both cases, the process takes 45 days to be completed. During this time, you can’t accept SNAP payments.

Once you have completed the registration process and have been approved for a SNAP permit, you will be granted a seven-digit FNS account number that will prove that your business is FNS approved. While this pretty much sums of the paperwork processing, you will need to reconfigure your processing equipment to be able to accept SNAP payments.


Processing Costs For EBT Payment Processing

Because the EBT program is financed and sponsored by the US government, it is much lower in costs for EBT payment processing as compared to traditional debit and credit transactions. So much so, there are no PIN debit or interchange fees for EBT transactions. However, your merchant account provider will charge you an amount for processing these transactions as its their right. Only a rare and handful of providers will allow you to process EBT transactions without any fees.

Not all EBT payment processing providers are very enlightened. You need to do a lot of research before signing up for a merchant account that offers EBT transactions. Unfortunately, the majority of providers never disclose their prices on their websites, so you will have to look in your contract in detail with a legal advisor or their sales rep before you get the correct answer.  Be sure you ask them if the merchant account uses flat-rate or a tiered pricing scheme so that you don’t end up paying the same amount for EBT as you do for debit and credit card transactions. This will result in a huge windfall for your merchant account provider since no interchange fee needs to be issued on EBT transactions.

You should be aware that PCI compliance requirements don’t apply to any of the EBT transactions. This doesn’t make a difference for merchants who accept both debit and credit or EBT transactions. However, if you have a merchant account, the best way to accept such payments is to be charged without PCI compliance fees.

Finally, it is crucial to know that all providers don’t offer these payments. If you’re opening a new merchant account or have switched your provider, this is something you need to clarify with the merchant before signing up.  Opening up an EBT payment processing option for your business will open a window of reaching out to a whole new segment of previously untapped customers. This is going to give you an unbeatable edge over your competitors. However, before selecting an card processing merchant, you need to make sure they are reliable and authentic.

As mentioned earlier, there aren’t many EBT processing merchants that clearly advertise their payment and prices, but we, not only display EBT payments and traditional debit/credit cards payments as transparently as possible, but also help out our clientele in every step of the way. Need help in setting up EBT payment processing for your business? Give our live sales representative a call. We`ll have your business on the bandwagon in no time!

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