The California Department of Social Services (CDSS) and the Office of Technology and Solutions Integration (OTSI) have announced a delay in their statewide transition to chip-enabled EBT cards. Originally planned for this summer, the state now aims to begin mass card replacement in mid-January 2025.

Electronic Benefits Transfer (EBT) cards allow cardholders to access their Supplemental Nutrition Assistance Program (SNAP) benefits to purchase eligible food items at authorized retail stores, such as convenience or grocery stores. However, recent reports indicate an increase in SNAP skimming fraud, with bad actors using skimming devices to steal EBT card information and to conduct fraudulent transactions that leave legitimate cardholders with empty benefit accounts. USDA reports that in 2023, $61.5 million was returned to SNAP beneficiaries nationwide to replace stolen benefits.

According to USDA, modernizing EBT cards to include chip technology is a critical step in enhancing SNAP benefit protection, as chip cards are harder to copy to steal SNAP account information. Currently, California and Oklahoma are the only two states with plans to transition their EBT cards to chip.

EBT cards operate on a system that uses different specifications from those of ordinary chip-enabled credit and debit cards. As a result, new standards had to be developed to enable the new EBT cards to work with existing chip technology, which were just finalized and published. In their memo, CDSS and OTSI state that “the process of developing and deploying code updates is taking longer than originally planned, resulting in the need to adjust the timeline for mass card replacement.”

By moving the mass card replacement to mid-January 2025, California is giving retailers and payments processors three additional months to implement EBT chip acceptance. Oklahoma does not plan to begin its own card replacement efforts until spring or summer 2025.

What should SNAP retailers do to prepare for EBT chip cards?

NACS strongly encourages all SNAP retailers in California and Oklahoma to begin testing their systems now to understand how they will be affected when an EBT chip card is presented. Retailers may need to work with their IT teams, processors or POS manufacturers to address any potential issues. If your processor is unable to supply test cards, FIS can provide them directly upon request via EMV.Testcards@fisglobal.com.

NACS and the Merchant Advisory Group also hosted a webinar in July, which covered what SNAP retailers need to know in order to update their payments systems to accept the new chip-enabled cards. If you have any additional questions about the EBT chip card migration, you can contact Margaret Hardin Mannion, NACS manager of government relations, at mmannion@convenience.org.