SNAP Modernization & EBT Chip Cards

The Issue

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, particularly because EBT cards still only operate with a magnetic stripe. Bad actors then use skimming devices to steal EBT card information and to conduct fraudulent transactions that leave legitimate cardholders with empty benefit accounts. USDA reports that since 2023, over $94 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 and steal SNAP account information. Today, California and Alabama are the only states that have distributed EBT chip cards to SNAP participants. Many other states have plans to do the same, and USDA has a map that shows which states are currently in the process of transitioning to chip cards.  

Retail Impact

This transition is moving fast and could lead to system failures if retailers haven’t done the work to be ready. NACS encourages all SNAP retailers to begin updating their POS systems now, as SNAP retailers located in the affected states and bordering states must be prepared to accept EBT chip cards, as they will soon begin to see an increase in EBT chip card usage at their locations.

For more information, visit:

• USDA – SNAP EBT Modernization Overview
• USDA – SNAP EBT Chip Card Technical Resources
• The SNAP EBT Modernization Technical Assistance Center