Preparing Your POS for the USDA’s New SNAP EBT Chip and Tap-to-Pay Mandate

The Shift to Secure EBT Transactions

The U.S. Department of Agriculture (USDA) is taking decisive action to protect Supplemental Nutrition Assistance Program (SNAP) participants from the rising threat of card skimming and cloning. As part of a broader modernization effort, the USDA has proposed a rule requiring all states to issue SNAP Electronic Benefit Transfer (EBT) cards equipped with modern chip and tap-to-pay (NFC) capabilities. This regulatory shift aims to replace the vulnerable magnetic stripe technology that has historically been the primary target for bad actors.

For merchants, this transition is not merely a technical update; it is a critical security upgrade. By moving toward EMV-compliant chip and contactless technology, the industry aims to replicate the significant fraud reductions seen in the broader credit and debit card landscape.

Why the Change is Necessary

Card skimming—where criminals attach illicit devices to point-of-sale (POS) terminals to steal card data—has become a national concern. Because SNAP benefits are essential for families to meet their food needs, the impact of benefit theft is devastating. Criminals often use skimmed EBT data to clone cards or verify stolen credentials, making the transition to chip-based security a vital step in ensuring the integrity of the program.

What Merchants Should Do

Compliance with this upcoming mandate requires proactive coordination with your payment technology partners. Follow these steps to ensure your business is ready:

1. Contact Your POS Provider Immediately: Reach out to your POS service provider or Third-Party Processor (TPP) to confirm your hardware supports chip and tap-to-pay for EBT transactions. Ask specifically about the SNAP EBT Application Identifier (AID) configuration.
2. Test Your Equipment: Many providers offer test cards to verify that your terminal correctly recognizes and processes chip-enabled EBT cards. Do not wait until your customers arrive with new cards to discover a compatibility issue.
3. Review Fallback Procedures: While the goal is to use chip or tap-to-pay, ensure your system is configured to allow for magnetic stripe "fallback" if a chip read fails, as per USDA guidance. However, the primary attempt should always be via chip or tap.
4. Inspect Terminals Daily: Regardless of the technology, continue to perform daily physical inspections of your POS terminals and PIN pads to check for signs of tampering or unauthorized attachments.
5. Train Your Staff: Ensure your team knows how to assist customers if a transaction fails. Reassure customers that the issue is a technical one and document any error codes to share with your POS provider.

ONKORE Perspective

At ONKORE, we view this mandate as a necessary evolution in the payments ecosystem. While the burden of upgrading hardware often falls on the merchant, the long-term benefit of reduced fraud and increased consumer trust in the SNAP program is invaluable. Merchants should treat this as an opportunity to audit their entire payment security posture. By prioritizing these upgrades now, you not only comply with federal requirements but also protect your store from the reputational and operational risks associated with being a target for skimming activity.

Retailers authorized to accept SNAP will eventually need to ensure their POS hardware supports chip and tap-to-pay functionality for EBT cards to comply with the proposed fraud-reduction mandate.

Affected industries: Grocery, Convenience Stores, Retail, Farmers Markets

Audit your current POS hardware for EMV and NFC compatibility.