Accepting EBT is easier than the credit or debit cards for payments. EBT refers to the electronic card system to receive government benefits for eligible participants. It includes grocery, unemployment, and housing assistance. The need for government-sponsored programs is growing, and the revenue is available to the certified stores of Food and Consumer Services accepting the EBT cards. There is tremendous growth with EBT processing.
Most states are following the magnetic stripe cards for the payment. There are online authorizations for transactions by giving the CVV security code. The customer pays for groceries running his card on the point of sale terminal or an electronic reader to benefit the retailer’s account. It is complete only when the customer enters the PIN that it reaches the retailer’s account. On entering the PIN, the processor electronically verifies the account balance and the PIN, thereby sending a denial or acceptable to the retailer.
The account of the consumer gets debited for the purchase amount’ and the account of the retailers receives the credit. No food stamps or money is given in exchange. The payment is to the retailers through the process of credit or debit card. Thus, the retailer must seek the best merchant services so that the consumer data is safe.
Is EBT a new technology?
Ebt systems for the online authorizations employing the magnetic stripe technology can use the technology of electronic funds transfer that the grocery stores use for the card payments. However, EBT is an electronic funds transfer, a special application technology that directly takes money from one account. The debit and the credit are faster. EFT is not new. In the 1980s, the banks started using machines as automatic tellers, and then EFT made its place in the private sector. The technology of smart cards is offered as merchant services and is used as offline authorization for many applications in Europe, though in the United States, it is not familiar. The legislative charges in 1996 as the Food Stamp Act permitted the states to go for the EBT systems and the technology. It was chosen so that the cost remains neutral and meets the standards.
How EBT Works
The EBT card is the same as the debit card, and the cardholder has a PIN, the personal identification number to access available funds. Government programs, such as the food stamps state-issued are for Infants/Women/Children and temporary assistance to needy families. These issue benefits are known as EBT on an electronic card.
The EBT card processing is through merchant services as an electronic payment system. It authorizes the card holder’s transfer as government benefits to the retailer or any store selling groceries, etc.
Benefits of EBT
EBT eliminates the process that is cumbersome to follow of the paper food stamp system. The program of Food Stamp Program in 1997 issues benefits nearly $20 billion. There were food stamp coupon deposits with retailers for 1.7 million in over 26,000 banks in one month. In turn, banks made 27,000 deposits in the Federal district banks. Thus, the coupons at each step are counted, making an enormous procedure involving labor-intensive and complex work.
EBT eliminates the handling of the food stamp paper system, and the accounting process is automated. Eliminating paper coupons reduce that may be stolen, sold, or lost, thereby reducing the fraud on food stamps. Thus, the EBT launch, even through merchant services, is secure as an electronic record for the transaction of food stamps. It is easy to identify and document trafficked food stamps or even if it is exchanged for drugs, cash, or illegal goods.
Recipients of EBT like the security and convenience of this card. They can draw the benefits anytime as per their requirement, instead of a one-time monthly allotment. If the card is stolen or lost, some other person cannot use the card as they do not know the PIN. On the other hand, replacing and canceling is also simple. Surveys also reveal that participants are happy with the EBT system in place of the paper coupon system. Many recipients believe the stigma with food stamp coupons decreases with the introduction of EBT.
Bankers and retailers also like the EBT as it gives the accounting simplicity and reduces the labor costs. There is no need to sort the coupons, bundle them or count to perfection. Every accounting with EBT is automatic. The federal government saves money and time by shifting to EBT. The printing, safeguarding, transporting, accounting, distributing, and destroying the coupons is also eliminated.