A Guide to EBT Merchant Services

Commonly called the Food Stamp Program, SNAP (Supplemental Nutrition Assistance Program) is aimed at providing TANF (Temporary Assistance to Needy Families). It is administered by the United States Department of Agriculture. It was given the name Food Stamps as previously individuals used paper coupons to shop. Today, the coupons have largely been replaced by EBT (Electronic Benefit Transfer), a payment system designed to allow its recipients access to assistance. EBT cards are issued to the beneficiaries which include SNAP benefits with other cash benefits like housing and unemployment assistance. Whenever an EBT card is used for buying food, the amount is subtracted from the EBT account and added to the linked bank account of the retailer within two business days.

What business qualifies to accept SNAP?

There are two major requirements from which atleast one has to be met by a business store to be eligible for enabling SNAP transactions:

  1. 50 percent of the store’s retail sales consist of SNAP-eligible foods (staple foods)
  2. OR the store offers at least three types of eligible foods in addition to at least two perishable eligible foods. The eligible or qualifying groups are bread and cereals, dairy, fruits and vegetables, and meats, including poultry and fish.

How to apply for EBT Payment Processing?

For enabling EBT merchant services, the store owner is required to verify identity via USDA e-authentication account under the USDA’s FNS. On getting approval, the business is given thirty days to complete and submit the application, including the following supporting documents:

  • Photo identification, e.g. driver’s license, passport
  • Social Security cards, copies for all owners, partners, officers, shareholders, and spouses
  • Business license
  • Your bank’s name and address
  • Merchant account provider’s name, phone number, address, and website

Once the approval process is completed the store owner needs to have a terminal that accepts PIN debit cards with or without PIN pad. For this the merchant account provider should be contacted and provide him with the seven-digit FNS Account number to set up the system.

Hardware Requirements

After getting a SNAP permit, the retailer must ensure that they have the right hardware. The basic requirements are:

  • Ability to accept PIN debit transactions through a separate, stand-alone unit or PIN pad integrated into your terminal
  • Ability to be programmed with your provider’s encryption keys
  • Ability to use a 7-digit FNS account number to set up your merchant account for EBT payments

Benefits of EBT Payment Processing

  • It provides an inclusive environment by engaging more and more people of the community by giving them access to wider variety of nutritious foods.
  • Enhances convenience of payments and faster checkouts using the EBT card
  • Operates as a regular debit card and easy to use.
  • Increased security as carrying cash is always riskier. Even some debit/credit cards can work without PIN.


Question: What is done in EBT?

Answer: The store is authorised by the FNS which also sets general EBT rules. The EBT system is managed by each state on its own which hires an EBT vendor to process EBT transactions, issue EBT cards, and, for a subset of retailers, furnish POS equipment.

Question: How does the customer know how much money is in his or her account?

Answer: SNAP customers are instructed to keep their EBT receipts, which have the account balance. The retailer must always provide the receipt. Customers may also call a toll-free number or do a balance inquiry on the POS terminal in the store. In most states, if customers have access to the Internet they can check their balance.

Question: What happens if the customer loses the card?

Answer: The transaction must not be done without the card. The proper action will be to refer the customer to the state’s toll-free customer service help line or county’s SNAP benefit assistance office.

Question: What will EBT cost?

Answer: If already having state-provided point-of-sale equipment, EBT costs nothing. If using EBT equipment provided by a third-party merchant services provider, the third-party processor will calculate the costs.