Two states leading the way in SNAP EBT modernization, fraud prevention

Collaboration as a cornerstone for successful implementation

An increase in Electronic Benefit Transfer (EBT) fraud is raising alarms across the nation. As of Q3 2024, $150 million in SNAP benefits had been stolen across the U.S. 

As states grapple with the complexities of fraud prevention, EBT chip technology has emerged as a promising solution that provides enhanced security for SNAP and TANF benefit recipients.

The pressing need for change in EBT technology

Since 2021, the increase in EBT food and cash theft has highlighted vulnerabilities in existing systems. Theft statistics from California and Oklahoma serve as stark reminders that current technologies must evolve to better protect public resources and the constituents who rely on them. The need for modernization in EBT systems is evident — a robust response is required to ensure that benefits reach those who need them without interruption.

EBT chip technology

Unlike traditional magnetic stripe cards, chip cards use advanced security features that significantly reduce the risk of unauthorized access. It is very easy for criminals to “skim” information from magnetic stripe cards then create counterfeit cards. Chip cards make it much more difficult to create a counterfeit card resulting in a significant reduction in fraud. 

Today, Oklahoma and California are at the forefront of this modernization effort, becoming the first two states to roll out EBT chip cards. Their proactive approach sets a precedent for others to follow, showcasing how states can leverage cutting-edge technology to protect constituents and safeguard public resources.

The successful implementation of EBT chip technology requires a collaborative effort among stakeholders. State agencies, retailers, and the USDA's Food and Nutrition Service (FNS) must continue to engage in open communication and cooperation. By sharing experiences and best practices, these leaders can create a unified approach to modernizing EBT systems, ensuring a smoother transition to the new technology.

Challenges in stakeholder engagement

While the benefits of EBT chip technology are clear, there are challenges to engaging the diverse array of stakeholders involved in the process. Navigating the interests and concerns of retailers, payment technology vendors, state agencies and federal organizations can be complicated. Lessons learned from the private sector can provide valuable insights for public agencies, helping them address potential roadblocks and fostering a culture of collaboration.

Navigating the path: Key challenges and insights

Our experts have designed this roadmap to help agencies better deploy modern EBT technologies.  

• Secure legislative support: Gain buy-in from state legislators and the governor to ensure backing for EBT initiatives.
• Engage all stakeholders: Include diverse stakeholder groups in discussions to leverage established national standards and available technical resources.
• Plan for a successful rollout: Develop a comprehensive “Go Live” strategy, encompassing pilot programs and interoperability.
• Seek retailer collaboration: Work closely with national and local retailers to test the acceptance of EBT chip cards.
• Assess retailer readiness: Create a plan for evaluating and monitoring retailer preparedness and progress throughout the transition.
• Strategize card replacements: Evaluate various card replacement strategies —attrition, mass replacement, staggered approaches — considering their pros and cons.
• Educate and outreach: Develop a robust outreach and education strategy for cardholders and retailers, encompassing media relations to enhance awareness.

The journey toward EBT modernization and fraud prevention is a critical one, particularly as states confront the rising tide of EBT theft. By adopting EBT chip technology, Oklahoma and California are taking bold steps to protect their constituents and improve the security of public assistance programs. Their leadership in this initiative not only benefits their residents but also sets a standard for other states to follow.

As the need for secure and efficient benefit distribution systems continues to grow, the lessons learned from these pioneering states will be invaluable. Through collaboration and innovation, states can work together to forge a safer and more reliable future for EBT programs nationwide, ensuring that essential benefits reach those who need them most.