USDA proposes chip technology to fight SNAP fraud

The U.S. Department of Agriculture (USDA) has proposed a rule requiring states to modernize Supplemental Nutrition Assistance Program (SNAP) Electronic Benefits Transfer (EBT) cards with chip and tap-to-pay technology to combat card skimming and cloning. The proposal grants states two years to implement the upgrades, which the USDA estimates will cost over $280 million but prevent at least $360 million in stolen benefits through the second quarter of fiscal year 2025. Retailers would also need to update their systems to accept the new cards.

The initiative stems from a 2022 congressional directive to address SNAP fraud. According to the proposal, some states have already adopted chip technology, reporting measurable declines in skimming incidents. The National Grocers Association (NGA) supported the move, emphasizing that “too many families learn their benefits were stolen at the checkout, when trying to buy food for their families, after multinational criminal organizations skimmed their EBT cards.”

Stephanie Johnson, senior vice president and head of government affairs at NGA, noted that states with chip cards have seen a “significant drop in skimming fraud.” She added that the rule aligns with goals of the bipartisan Enhanced Cybersecurity for SNAP Act, which NGA continues to advocate for. The proposal is part of broader efforts to enhance transaction security.

Comment on the proposal are accepted until December 22. The rule represents the latest attempt by federal authorities to strengthen safeguards for the Supplemental Nutrition Assistance Program. About the Author: Bill Wilson is the executive editor at Supermarket News, covering all things grocery and retail. He has been a journalist in the B2B industry for 25 years. He has received two Robert F. Boger awards for his work as a journalist in the infrastructure industry and has over 25 editorial awards total in his career. He graduated cum laude from Southern Illinois University at Carbondale with a major in broadcast communications.