This Guide about Merchant Services is meant for you to have a thorough insight. This will provide all-inclusive information regarding EBT payment acceptance, the registration process for becoming an authorized EBT retailer, hardware requirements, processing cost linked with the EBT payments, EBT card reader, and best merchant service providers.
Electronic Benefits Transfer (EBT) is an electronic system that allows a Supplemental Nutrition Assistance Program (SNAP) to pay for food using SNAP benefits. EBT is a part of the Federal Welfare Reform act of 1996. It is an automated cash benefit providing system. It allows various cash benefits such as CalWorks, CalFresh, a few others. As a matter of fact, this electronic system replaced the previous Food Stamps process with EBR along with TNAF ( Temporary Assistance to Needy Families) and SNAP ( Supplemental Nutrition Assistance Program) to enable customers to purchase food and other goods with a swipe card. The EBT is similar to a PIN debit card to make the purchase.
Further, EBT Merchant Services intended for business uses. In its most specific use, it usually refers to merchant processing services that enable a company to accept transaction payment through a secure channel using the customer’s credit card or debit card. More specifically, the merchant service providers work as an intermediary between the Bank, a person or organization looking to receive funds, and the person or organization looking to purchase goods or services.
Major Assistance Programs and EBT:
Following are a few important assistance programs using the EBT:
SNAP: The Supplemental Nutrition Assistance Program (SNAP) gives various nutrition benefits that help supplement the food budget for needy families to buy healthy food. It will make them move towards a life that is independent of any other support.
TANF: Temporary Assistance for Needy Families (TANF) is a federally-funded, state-run benefits program.
WIC: As its name suggests, it is a special program for the Women, Infant, and Children (WIC). The program aims to provide nutritious foods to women having financial issues. It also includes infants and up to five children who are at health and nutrition risk.
Regulatory Requirements for EBT Merchant Services:
To accept the EBT payments into your firm, you will have to undergo due regulatory process. There are a few requirements in this regard. The registration is quite simple and does not take much time. You can’t carry out all of the requirements online as well. At first, you have to get a permit, called an FNS permit or the SNAP permit from the FNS (Food and Nutrition Service). If you have a business and meet statutory conditions along with requisite documents, you can get a permit. To obtain a SNAP permit, you must make sure your business is meeting these essential conditions as given below:
Your business should sell the basic and essential foods in these categories:
- Bread, grains, cereals,
- vegetables and fruits
- Fish, meat, and poultry
Moreover, to verify the identity, you may need to create an eAuthentication Account. Having got the said account, you need to complete and submit an application along with requisite documents. After the eAuthentication Account gets approved, you will have to finish the application along with submitting it within 30 days. Further, the supporting documentation, along with the below-mentioned items, is required:
· A licensed copy of the current enterprise.
· A copy of your driver’s license, photos for identification, and the passport.
· A copy of the Social Security cards you have. It may include (all the owners, partners, shareholders, officers, and spouses of them).
· Information of merchant account provider. It may include the name, address, phone number, and website.
You can get this information printed out or upload it online, and then mail it to the NFS. The process of approval can take almost 45 days.
As soon as your registration has been accepted for the SNAP permit, a 7 digit number of FNS Account will be issued to you that would identify you as FNS approved enterprise.
Some additional Consideration regarding SNAP permits to accept EBT:
Following are a few additional considerations as regards the SNAP permits for EBT Merchant services:
· You can’t make use of an application process online if you are an (MSO) Multiple store owner. For the permit to get approved, you may need the assistance of an FNS representative.
· With the SNAP funds, you may only purchase the accepted food items. Certain food types are not allowed such as restaurant food, hot food, alcoholic beverages, and pet food
Besides, there are many special rules to the SNAP payments. You need to know about them. In this regard, the following are important provisions to accept EBT.
· Payments should be for the SNAP approved items food only.
· No refund of cash.
For EBT merchant services, especially during the acceptance of EBT, you will need processing hardware. Along with FNS registration and SNAP Permit obtainment, you may need to establish processing hardware. Most of the renowned terminals can be used with the EBT payments, but you may require to be well aware of a few special requirements. Firstly, your terminal should accept the PIN debit transaction. For that, you need a PIN pad so that the customers can put in their PIN.
After acquiring the terminal and a PIN pad, you just need to program it with the merchant account provider’s encryption keys. Most of the grocery shops, along with the restaurants that participate in a SNAP program should purchase their processing equipment. They may also acquire it from the merchant account provider. But, there are a few entities eligible for the free of cost processing equipment issued by the means of FNS. These includes:
· Eligible farmers’ market
· Farmers’ Direct Marketing
· Military commissaries
· Non-profit food purchasing organizations
· Group living organization
· Centers For The Treatment
· Services Of Prepared Meals
If your business falls in the above categories, you need to get in touch with the NFS.
The Cost of EBT Processing: For processing the EBT transactions, the costs are considered very low as compared to the debit and the credit card transaction. The EBT transactions have no interchange charges or PIN debit charges. But, the merchant account provider will usually charge you for processing the transactions.