Electronic Benefits Transfer, or EBT, is a system that allows financial aid recipients to buy goods with their federal and state welfare funds. Established following the overhaul of the old physical food stamp system, EBT allows users to swipe magnetic stripe cards at participating retailers in a process that closely resembles PIN debit payments. The cardholder simply swipes the card, enters a secret PIN, and is either authorized or denied the purchase amount. The merchant then receives the payment electronically just like other card transactions.
A common misconception about EBT cards is that they are exclusively used to purchase food at grocery stores. This is only true of Supplemental Nutrition Assistance Program (SNAP) funds, which are intended to help families afford basic food staples. Funds from other government programs like Temporary Assistance for Needy Families (TANF) and state-funded aid can be spent in a manner similar to cash. This means that even if you don’t sell groceries, you may still benefit from accepting EBT payments from customers.
Below is a list of highly rated merchant services providers that offer EBT processing in addition to their own merchant accounts. Although EBT payments are not subject to interchange costs, processors are still permitted to charge a reasonable amount for processing EBT transactions. You should therefore be sure to inquire about all potential costs before adding EBT acceptance for your customers.