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EBT Merchant Services 101

November 24, 2021 • by jclarknationalprocessing-com

Electronic benefit transfer (EBT) is a unique option for retailers to cater to the needs of individuals who are on government assistance of some form. For example, EBT merchant services allow you to accept the following forms of payment:

  • Supplemental Nutrition Assistance Program (SNAP)
  • Temporary Assistance to Needy Families (TANF)
  • Women, Infants and Children (WIC)
  • State or federal aid programs

As a SNAP retailer, or something similar, you’ll open the doors for people who are on state or federal assistance programs to use their magstripe card to make purchases.

EBT Merchant Services 101

If you want to begin accepting EBT payments, you’ll find EBT merchant services that make it as simple and easy as possible to get started. But, first, let’s discuss some of the requirements that you’ll need to meet.

Requirements You Need to Meet as a Retailer

Since multiple forms of assistance are covered under the EBT definition, it’s crucial to know the acceptance requirements for each. For SNAP and most related programs, you’ll need to meet the following requirements:

  • Sell staple foods that fall into the following categories: dairy, bread, grains, cereals, fruits and vegetables, meat, fish and poultry. Additionally, at least two of the foods must be perishable.
  • Gross sales, wherein over 50% of retail sales come from one or more of the staple foods listed above if you do not need the previous requirements.

If you believe that your retail store meets the requirements above, you’ll need to go through a few government requirements, too.

Steps Needed to Legally Accept EBT Payments

Obtain your USDA FNS Permit

Retailers who want to accept EBT will need to obtain a USDA Food and Nutrition Service permit. SNAP retailers must meet this requirement, which will entail you going through a multi-step process:

  1. Register for an account with the USDA here.
  2. Activate your account.
  3. Fill out and send the SNAP application within 30 days.
  4. Provide all of the supporting documentation that is listed at the end of your application.

Finally, you’ll need to wait while the FNS processes your application. You can check the status of the application in real-time, at any time you want, using the official tracker.

Note: Retailers that have more than 10 stores will need to consider whether they’re a multi-store owner.

Supporting Documentation

While the supporting documentation will be listed on the application form and can change at any time, some of the copies of items that you’ll want to have available are:

  • Business license
  • Photo identification, such as passport or driver’s license
  • Social security card of all owners
  • Bank account information
  • Merchant account information

Thankfully, the FNS makes it rather simple to provide the necessary documentation. You can send physical copies through the mail, but most people will upload their documents to an online portal.

Since the entire permitting process can take up to 45 days, it’s crucial to provide all of the documentation as soon as possible to begin accepting payments. Additionally, you won’t be able to accept EBT payments during the processing period, so keep this in mind when applying.

Work With Your EBT Merchant Services Provider

Your merchant services provider should have a dedicated staff expert that knows how to assist you with obtaining all of the equipment required to accept payment. The expert will also discuss pricing options and ensure that you’re not paying fees for EBT services that are outside of the norm.

Install Equipment and Begin Processing

You may or may not need to have new equipment installed to process all EBT payments. A simple update may be all that’s necessary, but the logistics depend on your current setup and equipment. 

Once installed, you can begin processing the following in as little as 24 hours:

  • EBT
  • SNAP
  • Food stamps

Your equipment will handle the fine details while you expand your customer base by accepting EBT payments. Many merchants can also supply a basic system that will accept payments if your current equipment cannot be used. In most cases, newer equipment can easily be upgraded to accept EBT payments.

Of course, your merchant services provider can help answer some of your questions to ensure that you meet the requirements to accept EBT payments.

Benefits of Accepting EBT Payments

  1. Expand your customer base. First and foremost, when you fill out your EBT merchant application, you’re deciding to expand your customer base. Some 38 million people in the US received SNAP benefits in 2019. Of course, this figure is even higher when considering all of the other assistance programs available.
  2. Helping local communities. Sadly, people in your local community are hungry or need some form of assistance to meet their basic living needs. Becoming a SNAP retailer, or something similar, will provide more options for people in your local community.
  3. Easy adoption into Method of Payment systems. In the past, special equipment was necessary to accept EBT payments. However, EBT payment acceptance can be added through a Method of Payment to make it easier than ever to accept EBT.
  4. Increase revenues. When expanding your customer base, you’ll also improve your revenues while you help the surrounding community.
  5. Processing fees are low. Since EBT programs are government programs, the fees on transactions are much lower. You won’t have to pay PIN or interchange fees for any of the transactions. However, merchant service providers still have overhead for processing and will charge you a fee.

Due to the minimal document requirements, it truly makes sense for any retailer that qualifies to accept the EBT payment option. Government assistance programs help tens of millions of people who need food staples for themselves and their families.

Ultimately, you’ll be offering goodwill to local communities that may have otherwise had fewer options to use their assistance programs.

Shoppers and their families who go through hard times will remember the goodwill of a retailer willing to accept government assistance. In times of economic hardship, especially in recent years, retailers that accepted EBT increased revenue while appealing to a larger customer base.

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