Electronic Benefit Transfer (EBT) Definition

Merchant Account Electronic Benefit Transfer Explained:

What is EBT? EBT, or Electronic Benefit Transfer, is a system that allows state welfare recipients to pay for their goods using a card with a magnetic strip. This form of payment has replaced the Food Stamp Program, which issued paper coupons to recipients. EBT cards, which function as PIN-debit cards, may be used to pay for USDA-authorized groceries through the federal Supplemental Nutrition Assistance Program (SNAP) or to buy goods with cash benefits issued at the state level or through Temporary Assistance for Needy Families (TANF).

EBT transactions are processed in a way that is similar to PIN-debit transactions. A customer swipes the card through a point-of-sale terminal and enters a secret PIN to authorize the purchase. The funds are then deducted from the benefits account associated with the card. It is illegal for anyone to charge card processing fees for acceptance of EBT SNAP cards, but surcharges may be added to cash benefit cards.

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