In dealing with SNAP, the Supplemental Nutrition Assistance Program, one must definitely come across the term Electronic Benefits Transfer (EBT). Do you ever wonder what it is about or how it works? Not to worry, as the guide will take you through everything you need to know about Electronic Benefit Transfer.
Electronic Benefit Transfer
The Electronic Benefits Transfer is a system, an electronic authorized one in the United States of America that allows a state’s welfare department issue benefits to recipients through a magnetically encoded payment card. This system has replaced the use of food stamps and coupons as payments for purchases.
Electronic Benefit Transfer is used by SNAP and the operation of this system has started for quite a while now. The commencement of its operations can be dated back to 2004. However, it completely took over the use of coupons and food stamps in 2008.
Benefits Via EBT
Like earlier mentioned, the EBT system contains SNAP benefits that are sent to eligible recipients. The benefits that can possibly be received through an Electronic Benefit Transfer card are of two types. The two types are;
- Food Benefits and
- Cash Benefits
The food benefits are federal authorized benefits. These benefits can only be used to make purchases for food items and even non-alcoholic beverages. In using Electronic Benefit Transfer, the purchases made can only be valid in authorized stores and retailers.
There are certain food items that can be purchased using food benefits and others that are not approved by the benefit program. The approved food items are mostly staple food products as they usually make up a person’s healthy diet. They include;
- Dairy products.
- Plants and seeds fit for household consumption.
- Vegetables and,
Some of the food items an Electronic Benefit Transfer card is not authorized to make payment for are;
- Food items that are consumable in the store.
- Paper products.
- Hot foods.
- Pet foods.
- Household supplies.
- Hygiene products like soaps, deodorants, menstrual care, etc.
These foods that are not approved by the benefit program are in a bid to promote and also encourage you to take up healthy eating habits. The program, SNAP also helps to stretch your food budgets and educate about preparation and nutrition of food for families that cannot provide food for themselves.
Using the Electronic Benefit Transfer system, a benefactor can make cashback of the benefits received. This is to say that, one can withdraw all their benefits from the EBT card sent. The cash benefits can also be used to pay for items and mostly services.
Although Electronic Benefit Transfer card works like an actual debit card, one cannot have the monetary benefits transferred from it to another card directly. However, to achieve this, one can make cash withdrawals from an ATM and then make a deposit into the account of another card. The
The food benefits are distributed through the Supplemental Nutrition Assistance Program called SNAP. Cash benefits include state general assistance, refugee benefits, and even Temporary Assistance for Needy Family (TANF) benefits.
Electronic Benefit Transfer Usage
The benefits which make use of Electronic Benefit Transfer usually sends in the benefits to their recipient in an EBT card. When a citizen applies for benefits from SNAP in their state residence, a form is filled out a form at their local food stamp office or online. If deemed eligible and the level of benefits has been determined, information is then transferred to the state’s EBT contractor.
An account in the recipient’s name is immediately created as soon as the information and the benefits are approved. It is in this account that the SNAP benefits are deposited electronically each month. When the recipient of the benefits gets their allotment. It is actually given them as an Electronic Benefit Transfer card. Once this card is issued, which is a plastic debit card. A personal identification number (PIN) is assigned or can be chosen by the recipient. Choosing this number is a bid to control access to their account.
The system makes use of magnetic stripe cards and on-line authorization of transactions. This is how the payment works:
- Recipient pay for items purchased by swiping the card through an electronic reader or a point of sale terminal (POS).
- The recipient is requested to enter the PIN to access the account.
- The PIN and the account balance is then verified electronically.
- After verification, an authorization for the payment or denial of the payment request is sent back to the retailer.
- The recipient’s benefit’s account is then debited for the amount of purchase. And the retailer’s account is also credited of the same if granted authorization.
The is no exchange of cash by hands as the entire transaction is all cashless.