SNAP EBT Service Provider Guide

Approved applicants of FMC’s Free SNAP EBT Equipment Program can choose from three participating service providers. Contact information for the service providers is listed below, along with a table comparing options and potential fees associated with each provider. Note that FMC’s Equipment Program covers the cost of equipment and most service fees for three years. Unless you select the EBT-Only option from PaymentSpring, transaction fees are the responsibility of the participant.

July 2017 Service Provider Update

  • PaymentSpring has joined the program, and offers a no-cost, transaction fee-free, SNAP-only equipment option.
  • MerchantSource new offers two new hardware solutions: the Clover Mobile and the Clover Flex. Participants from Iowa who wish to take advantage of the state’s initiative to reimburse EBT transaction fees must use MerchantSource.
  • MarketLink has partnered with the Massachusetts Department of Agriculture to offer the Healthy Incentives Program (HIP).  Massachusetts HIP is a state-wide program which enables SNAP shoppers to increase their purchasing power at market. Farmers markets and farmers in Massachusetts who wish to participate in the HIP program must use MarketLink as their service provider.

MarketLink
marketlink.org
Wireless Carrier: Verizon

To sign with Marketlink, complete this online form: https://www.worldpay.us/partners/marketlink

Ricky Aviles
Novo Dia Group
(o) (512) 371-4134 ext. 3747
(c) (512) 413-428
ricky.aviles@novodiagroup.com

MerchantSource
merchantsource.com
Wireless Carrier: AT&T

Kim Lyons
Merchant Resource Center, LLC
(o) 1(800) 313-5198
(c) (239) 246-7732
KimL@merchantsource.com 

PaymentSpring
paymentspring.com
Wireless Carrier: TNS

Jason Butts
(o) (402) 513-4573
(c) (402) 720-7972
Jason.Butts@PaymentSpring.com

Mitch Treu
(o) (402) 458-2248
(c) (402) 212-9762
mitch.Treu@paymentspring.com

Assessing Your EBT Equipment & Service Needs

Finding the right service provider for your EBT and debit/credit card reader requires some 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. To choose the right service provider for your market, first assess your market’s capacity and needs:

Connectivity: Most farmers markets require a wireless POS device, due to an outdoor location, away from landlines. In that case, you need to have reliable wireless service in your area. Find out which major cell carriers (like AT&T and Verizon) have the best cell signal at your market. If you’re in an area without a cell signal, you’ll need to explore other options such as getting a wireless hotspot, connecting to a landline, or as a last resort, using manual vouchers. 

Payment Options: EBT-only equipment is available, but many markets choose to also offer debit and credit transactions. Each type of transaction comes with its own set of fees, so estimating how many transactions you might have at your market will help in determining costs. See our section on debit and credit to learn about the benefits, costs, and requirements of each.

Funding: Multiple costs are associated with EBT programs. Equipment costs, service fees, transaction fees, and wireless costs, and purchasing scrip will be required, in addition to the staff time it takes to run the EBT machine and handle the accounting. Properly marketing your EBT program can also be costly, requiring staff time, design, printing, and other outreach costs.

As yourself what resources your market has available, and if there are any organizations in your community that might be interested in sharing the financial or staffing burden. See a more detailed outline of program costs in the Should You Offer SNAP EBT at Your Market? section of this guide, and also take a look at Ten Ways to Fund Your EBT Program, and the State and Federal Grant Opportunities.

Organizational Stability: Does your market have the organizational infrastructure in place to ensure it continues beyond this season? Will the market have funding available to support next year’s EBT program? An EBT service agreement or contract is for a set term, anywhere from one month to three years. More established markets may be comfortable with a long-term contract, while newer markets, or those without much organizational structure may opt for a shorter or more flexible agreement. Similarly, organizational stability may impact your decision to purchase or rent EBT equipment. 

Once you’ve considered these questions, ask around to other market organizers in your state. Who’s their service provider? Has it been a good experience? After consulting your peers, contact your service providers of choice for more information. 

What About Debit and Credit?

To accept SNAP EBT at your market, you’ll need a point of sale device (POS). You can choose to only accept SNAP EBT with your POS, or you can choose a POS that allows you to also accept credit and/or debit cards. Should you include debit and credit? The majority of markets that accept SNAP EBT, debit, and credit cards find that most transactions – over 80% ‐‐ are for debit and/or credit cards. Offering multiple payment options at your market can help increase vendor sales and expand your customer base, but offering SNAP EBT, debit, and credit services increases the number of transactions you’ll be processing, increasing your bookkeeping requirements.

Transaction fees different depending on what type of card a customers pays with, and if they authorize the use with a signature or PIN. Service providers have detailed lists of possible transaction fees; after receiving on, you can do the math on some sample transactions to see how much you’ll incur in fees. Equipment Program participants are only required to offer SNAP EBT, and are free to refrain from accepting debit or credit if they choose.  Some markets choose to accept only debit cards, and some (like the Durham Farmers Market and Ithaca Farmers Market, for example) even opt to bring a temporary ATM onsite during market days rather than offer debit services themselves.

Estimated Costs
The cost of your SNAP program will depend on: 1) which EBT equipment and service you choose, 2) the number of transactions at the market, 3) the fixed monthly card service fees, and 3) which funding opportunities your market is eligible to receive. In addition, markets need to secure paid personnel or volunteers to provide cards services at the information booth, manage the bookkeeping of sales and reimbursements, and promote the SNAP EBT offering. Here’s are estimated time and dollars resources need to start up and maintain a successful program, based on analysis from the Washington State Farmers Market Association:

For EBT Only:

  • Obtain a SNAP License: Free
  • Purchase or Rent SNAP EBT Equipment: $400-$1,200 one time cost
  • Transaction costs: $.10 – $.15 per SNAP transaction
  • Fixed monthly Service Plans: $20 – $40
  • Purchase Tokens: ~ $150
  • Point of Purchase Customer Service (at market): 4-5 hours
  • Reporting & Tracking: 2 hours per week of staff time
  • Signage & Advertising: ~$750/year
  • Outreach: 1-3 hours per week of staff time

For EBT, Debit and Credit

  • Obtain a SNAP License: Free
  • Purchase or rent EBT Equipment: $400-$1,200 one time cost
  • Transaction costs: $.10 – $.15 per SNAP transaction, debit and credit cards fees are 1 % to 2+% of token sale plus a $.10 to $.20 fee.  Prices vary, ask the card service provider for details.
  • Fixed monthly Service Plans: $20 – $40
  • Purchase Tokens: ~ $300
  • Point of Purchase Customer Service (at market): 4-5 hours
  • Other supplies (paper, batteries, etc): $200 annually
  • Reporting & Tracking: 2-5 hours per week of staff time
  • Signage & Advertising: ~$750/year
  • Outreach: 1-3 hours per week of staff time

Note: Costs will likely be toward the higher end for markets that choose to add Credit in addition to Debit 

Service Contracts & Options

The service providers participating in FMC’s Equipment Program all have experience working with farmers markets and direct marketing farmers, but the equipment, customers service options, fees, and billing options vary between them. We encourage you to contact the providers directly for more information about their services. When contacting service providers, come prepared with a list of questions:

Connectivity: One of your first questions is whether or not the processor’s wireless provider has a strong signal at your market site. Typically, the processor can tell you if their service is comparable to cell service for major carriers such as AT&T and Verizon. If you manage multiple market locations, be sure to check the signal at each of your market sites.

Equipment:  What type of equipment do they offer? Is it EMV compliant? If it breaks, will the provider provide a new one? What are the features? If rental options are available, will you be renting to own, or will you be able to upgrade your equipment during your rental period?

Most service providers offer a wireless EBT terminal, which includes a keypad and a printer. MarketLink is offering a smart device based system (using an iPhone, Android, iPad or iPod touch), in addition to a card reader, wireless printer, and mobile app to process transactions. Other service providers are expected to release their own versions of smartphone based EBT systems soon.

Vx680_EMV_ImageEMV technology, (named for its creators, Europay, Mastercard and Visa) refers to a chip that’s been integrated into payment cards. This ‘chip and PIN’ technology protects confidential data better than magnetic strips. All POS devices and payment cards must transition to EMV by October of 2015. If your POS isn’t EMV compliant after October, it will continue to work, however, the liability for any fraud or data stolen from your POS will fall on you. Ask your service provider if their equipment is EMV compliant.

Contract: How long is the contract term? Are there cancellation fees? Are month-to-month, seasonal, or rental options available?

Customer Service: What is their customers service plan? Do they have a 24-hour hotline, or someone available on evenings and weekends, if that’s when your market is open? Will the customer service providers have farmers market experience? How will they respond if billing problems or issues arise?

Fees and Billing: Will you be able to turn off your machine or billing at the end of the market season? What are the fees to turn it on and off? What will you be charged while it is off? Ask for samples of the monthly statements. Can you easily understand them? You’re likely to see the following fees in your service provider agreement:

Transaction fees: Fees charged for every transaction through electronic transfers (debit, credit, EBT). American Express cards, Rewards cards, Business/Corporate cards and other various types of credit and debit cards incur varying types of transaction fees. Your provider may list out all of these various rates, or lump them into one rate. Typically, swiping a credit or debit card and verifying with a signature incurs a lower transaction fee than using the PIN (personal identification number) feature. Providers may include a swipe transaction fee (also called an offline transaction) and a separate PIN transaction fee. These fees are NOT covered in the FMC Equipment Program.

Interchange fees: A transaction fee on credit and debit transactions that is paid by retailers to card issuers (the banks that sponsor the credit or debit cards). These rates are set by the card associations (e.g. MasterCard or Visa) and are based on a combination of factors including amount of the transaction, total volume, and type of business. The interchange fee is supposed to cover the risk of fraud, transactional costs, and other overhead. By law, EBT transactions cannot incur interchange fees. All of the FMC participating service providers have lumped their interchange fees into their the overall transaction fees posted in this guide. Note that other providers could list the fees separately (transaction fee + interchange fee). These fees are NOT covered in the FMC Equipment Program.

Early termination fee: A fee charged by merchant service providers when a contract is ended prematurely. Early termination fees vary by provider. These fees are NOT covered in the FMC Equipment Program.

Seasonal fee: A fee that a service provider may charge if services are only used for a portion of the year. Paying the seasonal fee allows a market to avoid paying monthly service fees during months when the market is not operating. (As opposed to paying for an early termination fee, which is usually higher). These fees are covered in the FMC Equipment Program.

PCI compliance fee: PCI DSS stands for Payment Card Industry Data Security Standard, and it’s essentially a set of guidelines that businesses follow to ensure cardholder data remains secure. The PCI compliance mandate leaves the responsibility of validating compliance of merchants in the hands of the merchant service provider. Typically, a service provider will walk you through the steps of completing the annual PCI survey online, and charge a monthly PCI compliance fee. Some charge a non-compliance fee if you fail to complete the annual online survey. These fees are covered in the FMC Equipment Program.

Set up fee: A one-time, or annual administrative fee to set up your account and equipment. Ask your provider what’s included in the set-up costs, as these vary greatly between providers. Set-up fees are covered in the FMC Equipment Program.

Statement fee: A monthly fee for producing and sending your monthly transaction statement. This fee may also include other services – ask your provider. These fees are covered in the FMC Equipment Program.

Wireless fee: Fees paid for wireless service to an outside provider (like AT&T or Verizon). These fees are covered in the FMC Equipment Program if you use a wireless EBT terminal. If you choose to use a smart device based system (such as MarketLink), you may be required to pay a portion of the wireless fees.

State-Level Resources

Your state may have funding and support for EBT at farmers markets. Some states have support that goes above and beyond simply covering equipment costs, so we encourage you to check in with state contacts before applying to FMC’s program. See a state-by-state list of resources and contacts here.

SNAP EBT Glossary

App: Shorthand for “mobile application” which is designed and downloaded for smart phones, tablets, or other internet-ready mobile devices. 

Early termination fee: A fee charged by merchant service providers when a contract is ended prematurely. Early termination fees vary by provider. 

EBT: Electronic Benefit Transfer. The electronic system that allows SNAP benefit recipients to swipe a card to use their federal benefits, rather than paper vouchers. 

FMC: Farmers Market Coalition

FNS: Food and Nutrition Service is the agency within the United States Department of Agriculture that administers the Supplemental Nutrition Assistance Program (SNAP), WIC Farmers Market Nutrition Program (FMNP), Senior Farmers Market Nutrition Program, (FMNP) and WIC Fresh Fruit & Vegetable Cash Value Voucher (CVV) Program, among others.

Incentive Program: An incentive program offers SNAP (or any other nutrition benefit) recipients a financial incentive for redeeming their benefits on fruits and vegetables at the farmers market.

Interchange Fees: A type of transaction fee that is paid by retailers to card issuers (the banks that sponsor the credit or debit cards). The rates are set by the card associations (e.g. MasterCard or Visa) and are based on a combination of factors including amount of the transaction, total volume, and type of business. Issuers who collect the fees then pay the fees to the card associations.

For every debit/credit card that exists, there is an associated pre-set rate that the merchant service provider pays to the issuing bank. The interchange rate has two components: a percentage fee of the volume of the sale, and a per-transaction fee. Typically, the interchange rate will be written in this format:  2.00% + $0.10.

The Agricultural Act of 2014, prohibits interchange fees from applying to SNAP EBT transactions, however debit and credit transactions remain subject to interchange fees.

IRS: Internal Revenue Service. The revenue service of the United States federal government. The government agency is a bureau of the Department of the Treasury.

PCI Compliance: The Payment Card Industry Data Security Standard (PCI DSS, commonly referred to as simply PCI) compliance is designed to protect businesses and their customers against payment card theft and fraud. If your retailer accepts, stores, or transmits card data, PCI DSS compliance certification is required by card brands such as Visa, MasterCard and Discover.

Many service providers charge a PCI compliance fee and provides compliance support. For example, a PCI fee may be something in the area of $70-$120 a year, or about $6-$10 a month for compliance support involving scans and assistance completing compliance questionnaires once per year. The PCI fee may be greater or less depending on the level of support the provided. If the annual PCI compliance survey isn’t completed by the retailer annually, the service provider will often charge a non-compliance fee.

POS: A Point of Sale device is the equipment used to process an EBT, credit or debit transaction. Retail outlets typically use a wired POS, while most farmers markets require a wireless version. 

Scrip: In cases where individual farmers do not have a SNAP license to accept SNAP benefits, a farmers market can obtain a SNAP license and allow eligible farmers in the market to accept SNAP benefits, by issuing scrip and using a centralized point of sale device to process transactions. There are two basic scrip systems:  

  • Paper scrip or tokens: Market staff swipe the EBT card at a centrally located POS device, debiting the amount requested by the customer in exchange for paper scrip or tokens, which can then be used to shop at all eligible food booths in the market. Farmers trade the scrip/tokens with market staff for payment.
  • Receipts: A customer sets aside selected food at a farmer’s booth, and the farmer gives the customer a list of the selected items. The customer then takes the list to the centralized POS device, uses an EBT card to pay for the items, and receives a receipt. The customer then gives the farmer the receipt in exchange for the selected food. Market staff keeps track of the receipts and reimburse farmers based on the day’s purchases.

Seasonal fee: A fee that a merchant service provider may charge if services is are only used for a portion of the year. Paying the seasonal fee allows a market to avoid paying monthly services fees during months when the market is not operating. (As opposed to paying for an early termination fee, which is usually higher). 

SNAP: Supplemental Nutrition Assistance Program. A federal program that provides nutrition benefits to low-income individuals and families that are used at stores to purchase food.  The program is administered by the USDA Food and Nutrition Service (FNS) through its nationwide network of FNS field offices. 

Third Party Processor, Merchant Service Provider, Service Provider: The company that offers payment processing services (for example MarketLink works with the merchant service provider, Worldpay).

Tokens: Tokens are used as currency in farmers markets that offer SNAP EBT, credit or debit transactions through a centralized point of sale (POS) device. Market staff swipe the EBT, credit or debit card at the POS device, debiting the amount requested by the customer in exchange for tokens, which can then be used to shop at all eligible food booths in the market. Farmers trade the tokens with market staff for payment. Tokens serve as a scrip system.

Transaction Fees: Fees charged for every transaction through electronic transfers (debit, credit, EBT). These fees are paid to, and determined by the merchant service provider. Debit, credit and EBT transactions are subject to transaction fees. Interchange fees are a type of transaction fee that is paid by the merchant service provider to the issuing bank, and are set by the industry (Visa/Mastercard/ Discover). EBT transactions are excluded from Interchange fees. See Interchange fees for more info. 

USDA: United States Department of Agriculture

USDA FNS: United States Department of Agriculture, Food and Nutrition Service, the agency that administers the Supplemental Nutrition Assistance Program (SNAP), WIC Farmers Market Nutrition Program (FMNP), Senior Farmers Market Nutrition Program, (FMNP) and WIC Fresh Fruit & Vegetable Cash Value Voucher (CVV) Program, among others.

Apply for FMC's Free SNAP EBT Equipment Program

Visit FMCToolbox.org to submit or check the status of an application.