Mobile Payment Pilot RFV (608.48 KB)
The Mobile Payment Pilot Request for Volunteers (RFV) was released on July 12, 2022.
Overview
USDA's Food and Nutrition Service administers the Supplemental Nutrition Assistance Program (SNAP), in cooperation with SNAP state agencies. Through the state agencies, FNS issues approximately $56 billion in SNAP benefits to more than 18 million eligible households (data for FY 2019). SNAP benefits are currently issued electronically, through a technology called Electronic Benefits Transfer (EBT), which works similar to debit card technology. This technology allows SNAP recipients to redeem benefits for eligible food at retailers authorized to accept SNAP.
Section 4006(e) of the Agriculture Act of 2018 (2018 Farm Bill) requires the Secretary of Agriculture to allow SNAP recipients to use mobile payments – that is, to allow the use of personal mobile devices, such as cellular phones, tablets and smart watches - in place of physical SNAP EBT cards -to conduct SNAP transactions, subject to the result of five (5) mobile payment pilot projects. FNS will conduct these projects to evaluate whether allowing mobile payments is in the best interest of the Program, and to therefore, recommend allowing their use to the Secretary.
FNS intends to select SNAP state agencies to participate in up to five (5) mobile payment pilot projects. Applicant states should develop partnerships with necessary stakeholders (identified in section 2.1.2) and obtain commitment agreements. The pilot projects will require significant technical development (e.g., EBT system development), implementation support, and a formal evaluation to inform the feasibility of this technology for eventual use by all SNAP state agencies. Volunteering for these pilot projects will require resources, including, but not limited to, financial, technical, and staffing from all stakeholders. FNS will collect and analyze data from the pilot projects and analyze the requirements and resources that would be necessary to implement across all SNAP states. The FNS evaluation will inform the recommendation to the Secretary and, if ultimately necessary, the regulatory framework for mobile payments in SNAP.
There are potential benefits for SNAP recipients in utilizing mobile payments for SNAP transactions. According to the 2019 Pew Research Mobile Fact Sheet 1 , “Seventy-one percent (71%) of Americans that earn less than $30,000 each year own a smartphone (a personal mobile device capable of supporting mobile payment technology).” When a customer uses mobile technology to pay, the method of payment is not identified at the time of a mobile payment transaction. Therefore, the customer is not easily identified as a SNAP recipient, which can reduce stigma at the point of purchase. Mobile technology offers widely used payment options for recipients that can offer high levels of fraud protection through multi-level authentication strategies, recipient budget and management support because of real-time access to benefit information, and safe storage of receipts. In addition, mobile technology will allow SNAP recipients faster access to their benefits. Upon approval, loaded benefits accessible through the SNAP cardholder’s phone mitigates the card access issues occurring with long postal delays to receive cards in the mail. The SNAP recipient will still receive their physical card in the mail; however, through the use of mobile technology they will have access to their benefits days and weeks sooner than they would now. A final benefit for SNAP recipients identified during the research phase of this project is convenience, as the use of a mobile device to pay for goods and services leaves the customer with one less card to keep track of and carry around.
While offering potential benefits, mobile payment options also introduce potential challenges for SNAP recipients. These include possible data charges for mobile payment transactions, staying informed about general fraud protection practices and taking measures to avoid digital scams, understanding the importance of and enabling proper security measures, such as a mobile device passcode, and establishing of trust in a new method of payment. SNAP recipients may require new training or education in areas like managing security on their mobile device and what to do when a device is replaced, lost, or stolen.
Additional information can be viewed here.