As an increasing number of Americans participate in WIC, SNAP and other EBT programs, merchants are learning that there are benefits of accepting EBT that they had not previously realized. Let’s discuss a few of them.
Electronic benefit transfer (EBT) is an electronic system that allows for government funds to be transferred to individuals that qualify. These funds typically fall into two categories: food and cash. The former is issued through the Supplemental Nutrition Assistance Program (SNAP) and can be used to purchase groceries (eligible items). These benefits are issued via a magnetically encoded payment card. In the US, the average amount dispensed per participant is $125.
Millions of people in the US participate in SNAP, which provides financial relief and maintain basic standards of living. Formerly known as the Food Stamp Program, EBT has evolved greatly since the late 1990s. The use of mag-stripe cards has streamlined the issuance of benefits, and it has also changed the way merchants participate in the program.
Merchants that accept EBT payments play an important role. Not only do they broaden their customer base, but they open their business up to the greater community. While accepting EBT payments does require an upgrade to their POS systems, there are several benefits that are often overlooked.
Broader Customer Base
Over 45 million low-income Americans receive and use monthly benefits on things like foods, beverages, and other groceries, spending about $70 billion annually. Small, independent retailers and those that operate farmers markets should pay special attention; more than $22.4 million was spent at farmers markets in 2017.
The ability to accept EBT card payments can make or break a business of any size, but it can have an especially powerful impact on smaller merchants and farmers markets. For this reason, it’s important to carefully consider whether or not accepting EBT payments is right for your business. Those that qualify to accept EBT payments will need to upgrade POS systems to be able to accept WIC/SNAP EBT payments.
It’s almost always beneficial to accept EBT payments for a business that qualifies. Broadening a business’ customer base means greater profits. It’s also a way to support the greater community and enable all people to purchase fresh, nutritious food items in a convenient way.
EBT acceptance is equated with more revenue for retailers. In addition to broadening the existing customer base, it also allows retailers to retain customers that may have a change in financial circumstances and rely on WIC/SNAP benefits.
As noted earlier, farmers markets alone have seen a significant increase in sales made via SNAP benefits. The $24.4 million in SNAP benefits redeemed at US farmers markets in 2017 was a 35.2% increase from just five years earlier. As more markets and retailers research, invest in and participate in these programs, this number will likely increase.
When retailers adopt POS systems that accept EBT payments, they open up the business to generate more revenue.
Streamlined Payments Operations
It may not be obvious but accepting EBT payments can actually streamline your overall payments operation internally. Since qualified retailers must use a special POS system, it requires a review of current payment systems. This is generally a good thing to do every few years as the payments landscape changes rapidly; however, many retailers find this task burdensome and only do a review when absolutely necessary.
The good news is that technology advancements have made EBT POS systems extremely streamlined. The best path forward is usually for a merchant to replace a legacy POS system with one that is built to accept both traditional payment methods alongside EBT payments. Newer EBT POS solutions are often sleeker and more powerful than a retailer’s legacy system and can enhance the customer experience.
Realize the Benefits of Accepting EBT with TotilPay
Novo Dia Group offers an EBT-capable POS solution to give small retailers and farmers markets the ability to process debit, credit, and EBT transactions all from the same device. TotilPay, formerly known as Mobile Market+, is the fastest, most affordable and compliant way to accept SNAP and WIC. TotilPay allows retailers to accept EBT payments through a smartphone or tablet via a secure, encrypted connection.
After downloading the software from the app store, the card reader can be inserted into a smart device to accept EBT payments. Customers have the option to receive their receipt in print, as an email, or as a text. Since the solution is battery operated and communicates wirelessly via Wi-Fi or cellular network, merchants don’t need to worry about having a dedicated terminal, phone line, or even electricity. This solution is quickly becoming the standard for farmers and other small independent retailers that need a cost-efficient way to process EBT cards.