Do SNAP accepting businesses need specific point of sale equipment?
The government uses EBT (Electronic Benefit Transfer) to help qualifying consumers pay for nutritional foods under the Supplemental Nutrition Assistance Program or SNAP. In that sense, EBT is the mechanism and SNAP is the program that provides assistance.
EBT and SNAP replaces the old food stamps program with a convenient card that allows the transaction to be more like an easy credit or debit card transaction. That helps both SNAP point of sale business and consumers alike with a faster and more straightforward checkout process.
On the merchant side, accepting SNAP and EBT payments can help broaden your customer base, and it’s also the case that processing a SNAP payment at the point of sale is significantly cheaper from a transaction standpoint, which can help your business save even more money. That said, business owners must apply and be admitted into the USDA’s FNS program, as well as be responsible for installing and managing specific SNAP or food stamp processing equipment that is needed to adequately report all SNAP transactions as they occur.
Indeed, your SNAP point of sale equipment must be configured to report your FNS ID number along with each transaction, and that can be a source of frustration for merchants that already have a point of sale terminal that deals with credit cards, debit cards and other types of electronic payments. The good news is that certain terminals can be configured to do all the above, as well as accept EBT and SNAP transactions, which can make managing all your transactions easier than ever.
EBT Regulatory Requirements
Before you can accept any EBT or SNAP payments, you’ll have to first register as an EBT retailer. The program is run by the USDA’s Food and Nutrition Service, which is responsible for administering the SNAP program. Any business that wants to accept EBT payments must first apply for a permit from the FNS, as well as meeting certain criteria.
The first option is that your business must sell food staples in the following four categories: dairy; breads and grains; fruits and vegetables; and meat, fish and poultry. Additionally, you must also sell perishable foods in at least two of these categories.
The second option has to do with whether you sell food staples at more than 50 percent of your total retail sales.
If your business meets either of these two criteria, you can apply directly on the FNS website. After you obtain an account and start your application, you’ll have 30 days to complete it. If you neglect to complete your application within 30 days, your application will be reset and you’ll have to start over. Note that you’ll also need to provide specific financial information as well as supporting documents for all managers and partners involved in the enterprise.
Once approved, you’ll receive an FNS account number that identifies your business as an approved EBT retailer.
Rules Regarding SNAP Point of Sale Payments
Business that accept SNAP point of sale payments must adhere to certain FNS regulations. In addition to requiring an FNS capable point of sale device, as well as the sharing of important data with each SNAP transaction, each EBT retailer must ensure that all SNAP transactions are for SNAP approved food items only. Things like cash back or refunds are forbidden, and SNAP transactions may not be used to pay back previous debts. For all EBT payments, the customer must be present at the time of the payment and have entered the PIN themselves.
For most retailers, you’ll need a SNAP point of sale card reader to process your EBT payments. While you can configure existing devices to handle your SNAP payments, any error in configuration or setup can jeopardize your payments as well as your standing as an EBT retailer. That’s because each payment must include your FNS tax number and any misconfiguration can end up nullifying the transaction altogether.
Furthermore, if your point of sale device does not allow PIN based transactions, you’ll need a dedicated PIN pad to allow customers to input their SNAP PINs. Some point of sale terminals include these PIN pads on the device itself while others may feature a plug-in port to add a separate unit. As long as you have a suitable terminal and PIN pad, you’ll be able to accept SNAP point of sale transactions.
That said, your terminal will also need to be programmed with your FNS account number for submission with each transaction, which can delay payments or block them altogether if this is not done correctly. You won’t need an EMV terminal for touchless payments since EBT cards still use magstripes, but you may need to upgrade at a future time if the requirements change. Besides, your customers may already have certain touchless payment options, and offering that capability can help you do more business.
Note that EBT approved businesses are required to obtain their own SNAP and food stamp processing equipment, or to configure their existing equipment to work with the SNAP program. Exceptions are available for certain farmers’ markets, direct-marketing farmers, military commissaries, nonprofit food buying coops, group living arrangements, treatment centers and prepared meal services.
Save Money With EBT Processing
Since the SNAP point of sale program is run by the government, there are no processing or interchange fees for EBT transactions. That can actually help your business save more money over debit and credit card transactions that come with significant costs, especially when you add them up over hours, days, weeks, months and years. However, that also assumes that you can set up your existing point of sale devices to work with the program, and that may end up being more trouble than it’s worth.
Even still, working with a trusted SNAP point of sale provider can help you streamline all of your transactions with the convenience of SNAP processing equipment that does it all for you. You’ll pay a little bit for the simplicity, but it’s likely that your transactions will still be cheaper than comparable credit or debit card transactions.
Get started today by contacting Velocity Merchant Services. We can help you meet the needs of the SNAP program by sending you brand new point of sale equipment that is already configured and ready to plug and play. Contact us today and we’ll show you how your business can accept EBT and SNAP payments without having to jump through all those complicated hoops.