The grocery industry, primarily the National Grocers Association (NGA) and FMI – The Food Industry Association, is again sharing its support for the Ensuring Fee-Free Benefit Transactions (EBT) Act.
Bipartisan legislation led by Congresswoman Shontel Brown (D-OH) and Congressman Tony Wied (R-WI), the act would prohibit processing fees on Supplemental Nutrition Assistance Program (SNAP) electronic benefit transactions.
The EBT Act would make permanent a provision in the 2018 Farm Bill that prohibits states and state contractors from levying processing and other related fees from a state’s side of a SNAP electronic benefit transfer (EBT) transaction onto SNAP authorized retailers.
While a permanent ban on interchange or swipe fees in SNAP exists, the EBT Act applies the same permanent ban on state-side transaction fees being imposed on retailers.
SNAP-authorized retailers must pay for their side of the costs associated with a SNAP EBT transactions, but processing or other related fees outside of retailers’ control have never been previously imposed on SNAP authorized retailers.
FMI – The Food Industry Association
FMI issued its endorsement of the EBT Act, which protects grocers and customers by permanently prohibiting additional fees from being imposed on retailers for SNAP transactions.
“As private sector partners with the federal government serving as critical access points for SNAP participants, FMI and its grocery members are committed to strengthening the integrity and efficiency of SNAP for millions of customers in every community,” said FMI’s Chief Public Policy Officer Jennifer Hatcher.
“We are grateful for the bipartisan leadership of Representatives Brown and Wied in introducing the EBT Act to permanently protect SNAP authorized retailers from incurring processing or other related fees outside of their control for EBT transactions. Imposing these fees would create an unfair burden on both grocers and consumers.”
National Grocers Association
“Independent grocers are on the front lines of the fight against food insecurity, investing heavily in technology and training to ensure SNAP works for families who rely on it,” said Stephanie Johnson, group VP for government relations at NGA.
“The EBT Act is a necessary and common-sense solution to protect community-based retailers from new swipe fees that could compromise their ability to provide SNAP benefits and threaten food access in low-income areas. We applaud Representatives Brown and Weid for their thoughtful leadership on this important issue.”
For years, SNAP EBT transactions have been exempt from fees under USDA’s vendor-managed network, helping grocers of all sizes participate in the program without being penalized. Congress did not intend to allow fees on EBT transactions, but a loophole was created that this legislation would close.
With the transition to chip cards and mobile payments, grocers are incurring significant software and hardware costs, and there is growing concern that EBT processors may begin charging fees for SNAP transactions, similar to the fees imposed on non-SNAP debit and credit card purchases.
Such fees would be difficult for independent grocers, many of whom operate on razor-thin margins of 1.4 percent. A typical independent grocer that serves SNAP participants can process thousands of SNAP transactions every month.
The imposition of even a small fee per transaction could result in tens of thousands of dollars in new annual costs, an unsustainable burden for family-owned stores serving urban neighborhoods, rural communities and areas with limited food access.
“Grocers already absorb significant upfront and ongoing costs to participate in SNAP, from purchasing EBT-compliant point-of-sale systems to training staff and ensuring program compliance,” Johnson said.
NGA urges Congress to act swiftly on this bipartisan proposal and ensure that modernization efforts do not come at the expense of SNAP’s core mission: helping low-income Americans access healthy, affordable food.
[RELATED: NGA Touts Legislation For Permanent Ban On EBT Processing Fees]