SNAP EBT Equipment, Services and Implementation
To accept SNAP electronic benefit transfer (EBT) access at your market, you will need to select a Third Party Processor (sometimes referred to as a Merchant Service Provider) to provide the point of sale (POS) equipment, process transactions, and deposit money into your bank account. Finding the right service provider for your market requires a little research. Like shopping for a cell phone, there are multiple service providers, equipment options, types of service, and a range of fees to learn about before signing a contract.
Just like taking a scan of your market’s staff, structure, funding, and capacity, FMC recommends that you take some time to understand your market’s specific needs in order to select both the right technology, and the right third party processor (TPP).
You might be thinking, “Tech needs? I need to process EBT and I want to do it for as cheap as possible.” But rushed decisions with technology can create more problems for your market down the road, such as investing in technology that will soon be out of date or buying a point of sale system that’s too advanced and costly for your market’s model. By preparing yourself and your market before a phone call to establish a contract with a merchant service provider, you’ll enter the conversation more familiar with the terms and your specific operating model. Then, you can negotiate from a place of power and feel confident that your processor is holding up their side of the deal. Plus, you’ll be able to communicate your needs clearly to your prospective third party processor, which will save you a lot of time in the long run.
FMC recommends that markets and farmers spend some time to break down the factors of your model and understand your market or farm stand’s needs before selecting a device or third party processor — that’s why we’ve developed a series of questions you can work through as a market called our EBT Technology Market Discovery Process.
The Market Discovery Process includes a list of questions intended to jumpstart your thinking on specific EBT technology needs at your market or on your farm — as always, it’s best used in conjunction with real feedback from farmers and market operators who use particular devices, or have faced similar challenges.
For more definitions and clarity on EBT-related terms, visit FMC’s webinar: The Big Picture of SNAP/EBT Processing.
The following service providers have experience with farmers markets, and have been recommended by FMC members. This is by no means an exhaustive list—ask your peers for more service provider recommendations.
MarketLink is a program of the National Association of Farmers Market Nutrition Programs (NAFMNP) that assists farmers and markets with accepting the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) and electronic payments.
Implementing your New Program
Tokens are a form of market currency, also known as scrip, that is used with a centrally-located POS terminal program. Tokens allow customers to use EBT benefits as well as debit or credit cards and all vendors in the market have the opportunity for increased sales.
Here is how it works: a customer purchases market tokens from the central EBT location (often at the market’s information table) using their debit, credit, or EBT card, and then uses the tokens to purchase products from participating vendors. The vendors exchange the tokens back to the market according to an agreed-upon reimbursement schedule. The market keeps track of token sales versus token redemption to ensure that the system is functioning properly. A market can also use paper scrip instead of tokens, which tends to be less bulky, but also more easily counterfeited.
An alternative to tokens or scrip is a receipt system. With this system, the cardholder brings the produce she wishes to purchase to the vendor’s checkout. The vendor totals the sale and writes a receipt which includes the the vendor name, amount purchased, and items purchased. The vendor holds the shoppers purchase while the customer then brings this slip to the central POS market site. Here her card is swiped and she receives a sales receipt from a market staff-person, who signs the vendor receipt to show proof of purchase. The customer returns the vendor receipt to the vendor in exchange for her food purchase. At the end of the market, the vendor tuns in all shopper receipts and the market reimburses the vendor according to an agreed-upon payment schedule.
The advantages of the receipt system are that a) it has an extensive paper trail; b) it’s cost-efficient; c) there is nothing of value, like tokens, to be lost; and d) purchases can be precisely calculated down to the last penny (token systems usually are just use dollar tokens). On the other hand, tokens are much more shopper friendly and the debit/credit tokens have the advantage of multiple uses: to purchase products now or later, give as gifts, and brand the market with the market logo, to name a few. In addition, tokens may seem familiar and easy for customers to understand, attracting debit/credit customers as well.
Here are more great resources for using tokens at your market:
- For ways to communicate about your token system, look at Portland Farmers Market’s Tokens 101 for Shoppers.
- For token system logistics, see Market Umbrella’s YouTube Video, FAQ Token Systems Marketshare.
Other Resources from the FMC Resource Library:
- The Food Trust’s A Survey of Farmers Market SNAP Incentive Programs: Lessons, Challenges, and Trends
- Darlene Wolnik’s Vermont Market Currency Feasibility Report
- Project for Public Spaces SNAP/EBT at Your Farmers Market: Seven Steps to Success