How To Accept EBT/SNAP Payments: Comprehensive Guide For Small Business Owners


Operating a business isn’t a walk in the park, especially if you’re the owner of a small business. There are plenty of things that need to be taken into consideration—budgeting, product designing, investments you’re going to make, improving ROI… and the list goes on.

And when it comes to payment methods and ensuring that transactions are as smooth as possible, this is where business owners often feel stagnated. PayPal is the most common solution that is suggested, but the question is, is it right for the business you`re operating?

There are other payment options available that small businesses, especially those in the food and beverage industry, should consider.

How To Accept EBT/SNAP Payments?

One of them is the Electronic Benefit Transfer (EBT) payment processing. Businesses that allow EBT/SNAP payments have more chances of expanding their reach and connecting with a wider audience.

But the million-dollar question is, how does it work? How can businesses implement the EBT/SNAP payment processing to help their customers? Given below are a couple of things you can do to accept EBT/SNAP payments.

 

Register with the Government

EBT payment processing is a government-sponsored program. This means that, like every other government plan or program, you’re going to have to get your business registered.

On the bright side, the paperwork and registration are fairly easy, so it won’t take a lot of time and you can fill out all the forms online as well.

On the other hand, for the SNAP payments, you will need to have a permit from the US Department of Agriculture’s Food and Nutrition Service (FNS), so you will need to apply for one. As long as you meet the criteria for the program, you should be fine.

The criteria includes:

  • Your business sells staple foods in the following four categories: (1) dairy, (2) bread, grains, and cereals, (3) fruits and vegetables, and (4) meat, fish, and poultry. At least two of these categories must include perishable foods; or
  • One or more staple foods account for over 50% of your gross retail sales.

How To Apply For SNAP Permit?

You can register and apply for the permit through the official FNS website.

You’ll need to create an eAuthentication account. Once your account has been made and approved, you’ll have 30 days to complete and submit the documents, along with other documents required. Don’t worry, the application itself will take less than 15 minutes to fill out.

Since the registration is online, you won’t have to wait in line. All you have to do is fill the form and if you meet the criteria, your business will be qualified for EBT payment processing.

To apply for the permit, you will need:

  • Your merchant account provider’s information (including name, phone number, address, and website)
  • Your bank’s name and address; and
  • Copies of your Social Security cards (this includes all owners, partners, officers, shareholders, and their spouses)
  • Copies of your driver’s license, passport, or other photo identification
  • A copy of your current business license

When it comes to SNAP payments, you’ll need to follow a few rules. These include but are not limited to:

  • The customer must present their EBT card and enter their PIN at the time of payment.
  • Payments must be for SNAP-approved food items only
  • No cash refunds may be issued
  • No cashback may be issued

 

Get Right Hardware

After you’ve received your permit, you’ll need the right hardware to process all the EBT payments online. There are several requirements for this. You will first need to make sure your terminal accepts PIN transactions.

You will need a PIN pad for this. You can go for a stand-alone PIN pad, or integrate it into your terminal. Once you have a PIN pad, you’ll need to program your merchant’s encryption key into the pad.

However, if you’ve directly purchased a PIN pad from your merchant, then you don’t have to worry. The pad will be automatically programmed by the merchant to process the payments. The EBT payment process will be directly linked to the merchant’s account.

It should be noted that if you are a restaurant or a grocery store, you will be required to buy your own EBT payment process and SNAP equipment. However, there are some stores and restaurants that are provided with free equipment by the FNS. These include:

  • Treatment centers
  • Prepared meal services (other than for-profit restaurants participating in State-option restaurant programs)
  • Non-profit food buying cooperatives
  • Military commissaries
  • Group living arrangements
  • Eligible farmers’ markets
  • Direct-marketing farmers

The PIN that will be generated will have seven digits. Also, keep in mind that the EBT cards issued by FNS are currently magstripe-only. This means that you will not need an EMV-compatible terminal. Also note that if you’re switching providers, it’s possible that you will need to re-program your PIN and terminal to support your new provider.

What Are The Costs Associated with EBT Payment Processing?

Now let’s talk about the costs. One of the best things about online EBT payment processing is that since it’s based in the US and doesn’t involve a private bank, the transaction fee for it is considerably lower than credit/debit cards.

However, it all depends on your merchant. You won’t have to pay interchange fees, but your merchant has the right to charge you a fee for processing transactions. On the bright side, the fee they will charge will be a small amount. It’s rare for merchants to charge a fee and if they do, the amount is usually small—like $0.10 per transaction.

It’s safe to discuss this with your merchant before signing up. Before you sign the contract, make sure to discuss whether or not they will be charging a transaction fee. Unfortunately, not every provider openly discusses what they’ll be charging, so you’ll have to be wary. You can discuss the problem with your sales representative for clear answers.

Also, note that PCI-DSS compliance requirements do not apply to EBT payment processing. While this does not make a difference to merchants that deal with both EBT and traditional payment methods, if your merchant only provides EBT payments, then you should not be charged with a PCI-DSS fee.

Last but not least, remember that not all merchants support EBT/SNAP payment methods. To make sure your merchant does, you will need to discuss everything with them before registering for the program. While EBT payment process has its perks, remember that it has its limitations too.

It’s better to consider everything before deciding to sign up for the process.

If you’re looking for a service that can guide you through EBT and SNAP payments, you’ve come to the right place. Our consultants have years of experience in the industry and have helped thousands of small businesses like yours.

Feel free to connect with us to learn more about your options.

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