USDA Proposes Chip and Tap-to-Pay EBT Cards for All SNAP States

By Tom Whitfield

The USDA proposed a rule on Friday that would require every state to issue SNAP EBT cards with chip and tap-to-pay capabilities, a move the department says will cut fraud in the $supplemental nutrition program.

The agency published the proposal in the Federal Register. It would also require SNAP-authorized retailers to accept the upgraded cards, which means grocers and other operators will need point-of-sale machines capable of handling chip and contactless transactions.

The proposal forms part of a broader USDA effort to modernize the Supplemental Nutrition Assistance Program and reduce EBT fraud.

Why chip cards matter for fraud

Chip cards are harder to copy than magnetic-stripe cards, which makes it more difficult for criminals to steal SNAP account information, according to the USDA. The department pointed to credit and debit card issuers, noting those industries have "proven the effectiveness of the technology involved in reducing incidents of fraud."

Early state adopters back that claim. Stephanie Johnson, senior vice president and head of government affairs at the National Grocers Association, said in a statement: "States that adopted SNAP EBT chip cards have seen a significant drop in skimming fraud, and we appreciate USDA and the [White House] Task Force to Eliminate Fraud for moving every state toward that standard."

The NGA, which represents independent grocers, said in a Friday press release that it supports the proposal.

How many states already comply?

Nearly a dozen states have already issued EBT chip cards to their SNAP participants, including California, Oklahoma, Alabama, Michigan, Virginia and Massachusetts, according to the USDA. Half a dozen more are in the process of doing so.

If the proposal becomes a final rule, states would have two years to comply.

The USDA acknowledged the transition carries costs. In the proposed rule, the department said the shift to chip and tap-to-pay technology for EBT cards "will come at a financial cost to the State agencies administering SNAP and to other entities involved in the operation of EBT systems. However, the Department believes that it is critical for SNAP clients to have reliable and secure access to the benefits that they use."

What retailers need to do

For SNAP-authorized retailers, the practical requirement is hardware: the USDA noted retailers would need to ensure their point-of-sale machines can accept chip and tap-to-pay payments. Most large-format grocers already handle these payment types for credit and debit transactions, so the operational burden is expected to fall hardest on smaller operators with older equipment.

The compliance clock gives both states and retailers room to plan. A two-year runway from a final rule means procurement, card issuance and terminal upgrades can proceed on staggered schedules rather than in a single cutover.

What happens next

The USDA is accepting public comments on the proposed rule until Dec. 22. Retailers, state agencies and payment processors can submit feedback before the department drafts the final version.

For grocers, the so-what is straightforward: SNAP acceptance will soon require the same payment infrastructure already standard for cards, and the December comment window is the last formal opportunity to shape the cost and timing of that transition.