Electronic Benefit Transfer
Encyclopedia
Electronic Benefit Transfer (EBT) is an electronic system in the United States that allows state governments to provide financial and material benefits via a plastic debit card
. Common benefits provided via EBT are typically sorted into two general categories: Food and cash benefits. Food benefits are federally authorized benefits that can be used only to purchase food and non-alcoholic beverages. Food benefits, formerly called food stamps, are now called SNAP
(or Supplemental Nutrition Assistance Program). Cash benefits include state general assistance, TANF (Temporary Aid for Needy Families) benefits and refugee benefits.
State agencies work with contractors to procure their own EBT systems for delivery of SNAP and other state-administered benefit programs. In the United States, all SNAP benefits are now being issued via EBT.
For example, in the SNAP program, recipients apply for their benefits in the usual way, by filling out a form at their local food stamp office. Once eligibility and level of benefits have been determined, information is transferred to the state's EBT contractor and an account is established in the participant's name, and SNAP benefits are deposited electronically in the account each month. A plastic debit card, similar to a bank card, is issued and a personal identification number
(PIN) is assigned or chosen by the recipient to give access to the account. Recipients are offered the opportunity to change the PIN at any time, and are offered ongoing training if they have any problems accessing the system.
All states have systems that use magnetic stripe card
s and "on-line" authorization of transactions. When paying for groceries, the SNAP customer's card is run through an electronic reader or a point of sale
terminal (POS), and the recipient enters the secret PIN to access the food stamp account. Then, electronically, the processor verifies the PIN and the account balance, and sends an authorization or denial back to the retailer. The recipient's account is then debited for the amount of the purchase, and the retailer's account is credited. No cash money changes hands. Payment is made to the retailer through a ACH settlement process at the end of the business day. Most states' online EBT systems are interoperable through the Quest network, which is sponsored by the Electronic Benefits and Services Council (formerly the EBT Council) of NACHA-The Electronic Payments Association
.
Many states stagger the issuing of benefits to EBT SNAP accounts with the actual day of the month determined for each recipient based on their case number, social security number
, or date of birth. The states of Alaska
, Idaho
, Nevada
, North Dakota
, Oklahoma
, Vermont
along with Guam
and the US Virgin Islands credit accounts on the first of the month to all recipients, New Hampshire
credits on the 5th, and South Dakota
on the 10th.
The success of EBT enabled Congress to rename the Food Stamp Program to the Supplemental Nutrition Assistance Program
, as of October 2008, and update all references in federal law from "stamp" or "coupon" to "card" or "EBT". This was effected by H.R. 2419, The Food, Conservation, and Energy Act of 2008 (a.k.a. "2008 Farm Bill") passed into law as Public Law No: 110-234, over President Bush's veto.
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
. Common benefits provided via EBT are typically sorted into two general categories: Food and cash benefits. Food benefits are federally authorized benefits that can be used only to purchase food and non-alcoholic beverages. Food benefits, formerly called food stamps, are now called SNAP
Supplemental Nutrition Assistance Program
The United States Supplemental Nutrition Assistance Program , historically and commonly known as the Food Stamp Program, is a federal-assistance program that provides assistance to low- and no-income people and families living in the U.S. Though the program is administered by the U.S. Department of...
(or Supplemental Nutrition Assistance Program). Cash benefits include state general assistance, TANF (Temporary Aid for Needy Families) benefits and refugee benefits.
Usage
Through EBT, a recipient uses his/her EBT card to make purchases at participating retailers. Food-stamp benefits can only be used to purchase food items authorized by the USDA's SNAP program. Cash benefits may be used to purchase any item at a participating retailer, as well as to obtain cash-back or make a cash withdrawal from a participating ATM.State agencies work with contractors to procure their own EBT systems for delivery of SNAP and other state-administered benefit programs. In the United States, all SNAP benefits are now being issued via EBT.
For example, in the SNAP program, recipients apply for their benefits in the usual way, by filling out a form at their local food stamp office. Once eligibility and level of benefits have been determined, information is transferred to the state's EBT contractor and an account is established in the participant's name, and SNAP benefits are deposited electronically in the account each month. A plastic debit card, similar to a bank card, is issued and a personal identification number
Personal identification number
A personal identification number is a secret numeric password shared between a user and a system that can be used to authenticate the user to the system. Typically, the user is required to provide a non-confidential user identifier or token and a confidential PIN to gain access to the system...
(PIN) is assigned or chosen by the recipient to give access to the account. Recipients are offered the opportunity to change the PIN at any time, and are offered ongoing training if they have any problems accessing the system.
All states have systems that use magnetic stripe card
Magnetic stripe card
A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron-based magnetic particles on a band of magnetic material on the card...
s and "on-line" authorization of transactions. When paying for groceries, the SNAP customer's card is run through an electronic reader or a point of sale
Point of sale
Point of sale or checkout is the location where a transaction occurs...
terminal (POS), and the recipient enters the secret PIN to access the food stamp account. Then, electronically, the processor verifies the PIN and the account balance, and sends an authorization or denial back to the retailer. The recipient's account is then debited for the amount of the purchase, and the retailer's account is credited. No cash money changes hands. Payment is made to the retailer through a ACH settlement process at the end of the business day. Most states' online EBT systems are interoperable through the Quest network, which is sponsored by the Electronic Benefits and Services Council (formerly the EBT Council) of NACHA-The Electronic Payments Association
NACHA-The Electronic Payments Association
NACHA – The Electronic Payments Association manages the development, administration, and governance of the ACH Network, the backbone for the electronic movement of money and data in the United States. It is funded by the financial institutions it governs...
.
Many states stagger the issuing of benefits to EBT SNAP accounts with the actual day of the month determined for each recipient based on their case number, social security number
Social Security number
In the United States, a Social Security number is a nine-digit number issued to U.S. citizens, permanent residents, and temporary residents under section 205 of the Social Security Act, codified as . The number is issued to an individual by the Social Security Administration, an independent...
, or date of birth. The states of Alaska
Alaska
Alaska is the largest state in the United States by area. It is situated in the northwest extremity of the North American continent, with Canada to the east, the Arctic Ocean to the north, and the Pacific Ocean to the west and south, with Russia further west across the Bering Strait...
, Idaho
Idaho
Idaho is a state in the Rocky Mountain area of the United States. The state's largest city and capital is Boise. Residents are called "Idahoans". Idaho was admitted to the Union on July 3, 1890, as the 43rd state....
, Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
, North Dakota
North Dakota
North Dakota is a state located in the Midwestern region of the United States of America, along the Canadian border. The state is bordered by Canada to the north, Minnesota to the east, South Dakota to the south and Montana to the west. North Dakota is the 19th-largest state by area in the U.S....
, Oklahoma
Oklahoma
Oklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...
, Vermont
Vermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...
along with Guam
Guam
Guam is an organized, unincorporated territory of the United States located in the western Pacific Ocean. It is one of five U.S. territories with an established civilian government. Guam is listed as one of 16 Non-Self-Governing Territories by the Special Committee on Decolonization of the United...
and the US Virgin Islands credit accounts on the first of the month to all recipients, New Hampshire
New Hampshire
New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...
credits on the 5th, and South Dakota
South Dakota
South Dakota is a state located in the Midwestern region of the United States. It is named after the Lakota and Dakota Sioux American Indian tribes. Once a part of Dakota Territory, South Dakota became a state on November 2, 1889. The state has an area of and an estimated population of just over...
on the 10th.
The success of EBT enabled Congress to rename the Food Stamp Program to the Supplemental Nutrition Assistance Program
Supplemental Nutrition Assistance Program
The United States Supplemental Nutrition Assistance Program , historically and commonly known as the Food Stamp Program, is a federal-assistance program that provides assistance to low- and no-income people and families living in the U.S. Though the program is administered by the U.S. Department of...
, as of October 2008, and update all references in federal law from "stamp" or "coupon" to "card" or "EBT". This was effected by H.R. 2419, The Food, Conservation, and Energy Act of 2008 (a.k.a. "2008 Farm Bill") passed into law as Public Law No: 110-234, over President Bush's veto.