How To Accept EBT For Business: The Complete Guide To EBT Card Readers, Merchant Services, & Processing Fees
Want to add Electronic Benefits Transfer payments? The 5 best EBT providers listed below are good all-around choices for both EBT payments and traditional credit/debit cards.
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WRITTEN & RESEARCHED BY
Senior Staff Writer
UPDATED
Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.
EBT (Electronic Benefit Transfer) is a payment system designed to allow its recipients access to assistance under SNAP (Supplemental Nutrition Assistance Program), TANF (Temporary Assistance to Needy Families), or other aid programs sponsored by the Federal and state governments to buy food and goods.
Although there’s some paperwork involved, adding the ability to accept EBT payments can increase your overall sales while also helping your local community.
In this article, we’ll show you how to become an authorized EBT retailer and discuss the hardware requirements you’ll have to meet before you can accept EBT payments. We’ll also discuss the processing costs associated with EBT payments and recommend some top-rated merchant service providers that offer support for EBT payments at a fair and reasonable cost.
Learn More About Our Top Picks
| Company | Best For | Next StepsBest For |
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National Processing
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PaymentCloud
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Square
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Dharma Merchant Services
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Host Merchant Services
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Read more below to learn why we chose these options.
Table of Contents [hide][show]
- What Does EBT Processing Include?
- 5 Best EBT Processors
- 1. National Processing
- 2. PaymentCloud
- 3. Square/TotilPay
- 4. Dharma Merchant Services
- 5. Host Merchant Services
- How Much Does EBT Processing Cost?
- How Do I Accept EBT At My Store?
- Which EBT Processing Company Is Right For Your Business?
- FAQs: EBT Processing Companies
- In Summary: 5 Best EBT Processors
Table of Contents
- What Does EBT Processing Include?
- 5 Best EBT Processors
- 1. National Processing
- Why We Chose National Processing For EBT Processing
- National Processing Features
- National Processing Pricing
- 2. PaymentCloud
- Why We Chose PaymentCloud For EBT Processing
- PaymentCloud Features
- PaymentCloud Pricing
- 3. Square/TotilPay
- Why We Chose Square/TotilPay For EBT Processing
- Square/TotilPay Features
- Square/TotilPay Pricing
- 4. Dharma Merchant Services
- Why We Chose Dharma Merchant Services For EBT Processing
- Dharma Merchant Services Features
- Dharma Merchant Services Pricing
- 5. Host Merchant Services
- Why We Chose Host Merchant Services For EBT Processing
- Host Merchant Services Features
- Host Merchant Services Pricing
- How Much Does EBT Processing Cost?
- How Do I Accept EBT At My Store?
- Which EBT Processing Company Is Right For Your Business?
- FAQs: EBT Processing Companies
- In Summary: 5 Best EBT Processors
What Does EBT Processing Include?
The EBT system replaces the old food stamps program and provides a secure payment method for recipients of several government assistance programs, including those administered by the federal government and those run by individual states.
Here’s a very brief overview of the major assistance programs that use the EBT system:
- SNAP: The Supplemental Nutrition Assistance Program (SNAP) provides nutrition benefits to supplement the food budget of needy families, so they can purchase healthy food and move toward self-sufficiency. SNAP is a federal program administered by the USDA’s Food and Nutrition Service (FNS).
- WIC: The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) safeguards the health of low-income women, infants, and children up to age five who are at nutrition risk by providing nutritious foods to supplement diets, information on healthy eating, and referrals to health care. WIC is a joint federal/state program, where the federal WIC program provides grants to state governments to disburse through their networks.
- TANF: Temporary Assistance for Needy Families (TANF) is a federally-funded, state-run benefits program. Also known as welfare, TANF helps families achieve independence after experiencing temporary difficulties. At the federal level, the US Department of Health & Human Services administers the program. Each state government has its own program to disburse benefits. For example, in California, TANF benefits are distributed through the CalWORKS program.
5 Best EBT Processors
Accepting EBT for business shouldn’t involve settling for a substandard payment processor. The best providers for EBT processing are, unsurprisingly, also among the best all-around providers for retail businesses in general. Here are our five top picks for merchant services providers that support EBT payments.
1. National Processing
National Processing |
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Get a free Clover Go card reader from National Processing when you sign up. Claim your card reader.
Pros
- Month-to-month billing with no long-term contract available
- Interchange-plus & membership pricing offered for non-EBT transactions
- A good option for budget-conscious merchants
Cons
- “Free” equipment may require a long-term contract
- Early termination fee may apply if “free” equipment chosen
Get Started With National Processing
2. PaymentCloud
PaymentCloud |
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Exclusive Promo: PaymentCloud will give you $200 if they can't beat your current rate. Get Your Quote
Pros
- Reputable high-risk specialist
- Reasonable rates & fees
- Free credit card terminal with account
Cons
- No publicly disclosed pricing
3. Square/TotilPay
Square |
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Get a free card swiper from Square at no cost when you create a free account. Claim your card reader.
Pros
- No long-term contracts or early termination fees
- Predictable flat-rate pricing for non-EBT transactions (through Square)
- No processing charges for EBT transactions
- Works with your existing Square account
Cons
- Account stability issues
- Not available to high-risk merchants
4. Dharma Merchant Services
Dharma Merchant Services |
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Pros
- Outstanding sales transparency and highly ethical business practices
- Month-to-month billing with no early termination fees
- No annual fee or monthly minimum
- Excellent customer service and support
Cons
- Not recommended for businesses processing less than $10,000 per month
- Not available to high-risk merchants
Get Started With Dharma Merchant Services
5. Host Merchant Services
Host Merchant Services |
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Pros
- No setup or application fees
- Month-to-month billing with no long-term contracts
- No monthly minimums
- Interchange-plus pricing for non-EBT transactions
Cons
- Can be expensive for low-volume merchants
Get Started With Host Merchant Services
How Much Does EBT Processing Cost?
Because the EBT program is sponsored by the US government and not a private bank or credit card association, EBT processing fees are much lower than those for traditional debit or credit card transactions. In fact, there are no interchange fees or PIN debit fees for EBT transactions.
However, your merchant account provider has the right to charge you a reasonable amount for processing these transactions. While some providers allow you to process EBT transactions for free, most will charge a small per-transaction fee. (Dharma Merchant Services, for example, charges a flat $0.10 for each EBT transaction.)
Unfortunately, most providers on the market do not disclose their pricing for EBT transactions on their websites — requiring you to search your contract documents or discuss it with your sales representative to get a straight answer. Be especially vigilant if your merchant account uses flat-rate or tiered pricing, as you might be paying the same rates for EBT transactions as you do for regular credit or debit card purchases. This would result in a huge windfall for your provider, as there’s no interchange fee that needs to be passed on with EBT transactions.
You should also be aware that PCI-DSS compliance requirements do not apply to EBT transactions.
This won’t make a difference for most merchants who accept both EBT and traditional debit/credit card transactions. However, if you have a merchant account that is set up only to accept EBT payments, you should not be charged any PCI compliance fees.
Not all providers offer support for EBT payments, so this is something you’ll want to clarify before signing up for a new merchant account or switching providers. For example, Square has only recently added support for EBT payments through the third-party TotilPay app.
The SNAP EBT Third Party Processor (TPP) List and Guidance to Retailers provides a list of FNS-approved providers that support EBT payments. Now over five years old, it’s quite dated and appears to be under revision. Nonetheless, it has some useful tips for selecting a merchant account provider that supports EBT payments. In examining the list of vendors provided by the FNS, we note that most of the processors included on the list that we’ve reviewed have received mediocre to below-average overall ratings.
Because of this, we highly recommend that you disregard the processors listed with FNS and select one that we’ve reviewed favorably.
How Do I Accept EBT At My Store?
Like any government-sponsored program, there’s a fair amount of paperwork required before you can accept EBT payments. However, the EBT application process is pretty straightforward and usually can be completed online.
The US Department of Agriculture’s Food and Nutrition Service (FNS) administers the SNAP program. The first thing you need to do is obtain a permit (usually called either a SNAP permit or an FNS permit) from FNS. These permits are available to any qualified business that meets the appropriate statutory criteria and submits an application (with supporting documentation).
To be qualified for a SNAP permit, your business must meet at least one of the following criteria:
- Your business sells staple foods in the following four categories: (1) dairy, (2) breads, grains, and cereals, (3) fruits and vegetables, and (4) meat, fish, and poultry. At least two of these categories must include perishable foods; or
- One or more staple foods account for over 50% of your gross retail sales.
Are you qualified? Good! Simply point your browser to the FNS website, and you can get started. Before you can apply for a SNAP permit, you’ll need to establish an eAuthentication Account with the FNS to verify your identity. This step can be completed online in just a few minutes.
Once you have an eAuthentication Account, you’ll need to fill out and submit both an application and supporting documentation. After your eAuthentication Account is approved, you’ll have 30 days to complete and submit the application and all supporting documents.
The application itself can be completed online in as little as 15 minutes, but it asks for a lot of information about your business that might require you to do a deep dive into your records for specific answers. Supporting documentation is also required, including the following items:
- A copy of your current business license
- Copies of your driver’s license, passport, or other photo identification
- Copies of your Social Security cards (this includes all owners, partners, officers, shareholders, and their spouses)
- Your bank’s name and address
- Your merchant account provider’s information (including name, phone number, address, and website)
This information can be uploaded online or printed out and mailed to the FNS. In either case, the approval process can take as long as 45 days to complete. During this time, you won’t be able to accept SNAP payments.
When you’ve completed the registration process and been approved for a SNAP permit, you’ll be issued a seven-digit FNS Account Number that identifies you as an FNS-approved business. While that’s pretty much it for the paperwork requirements, you’ll still need to reconfigure your processing equipment to accept SNAP payments.
See below for details.
Here are some additional considerations regarding SNAP permits:
- In addition to traditional grocery stores, SNAP permits are also issued to qualified farm stands and farmers’ markets.
- If you’re a Multiple Store Owner (MSO), you cannot use the online application process. Instead, an FNS representative will work with you directly to get your permit approved. The FNS defines a Multiple Store Owner as a business entity that owns 10 or more eligible retail food stores.
- Only approved food items may be purchased with SNAP funds. Hot food, restaurant food, alcoholic beverages, pet food, and other non-food items are not allowed. (Note that some of these items may be purchased with TANF funds.)
Numerous special rules apply to SNAP payments that you’ll want to be familiar with. Here are the most important considerations:
- Payments must be for SNAP-approved food items only
- No cash back may be issued
- No cash refunds may be issued
- The customer must present their EBT card and enter their PIN at the time of payment
While EBT programs have traditionally been limited to in-person sales, the SNAP Online Purchasing Pilot Program has been operating for several years to allow online grocery purchasing and delivery using EBT benefits. The program is currently available in 49 states and the District of Columbia. Note that EBT benefits can only be used for purchasing approved items, and cannot be used to cover delivery fees, tips, etc.
Which EBT Processing Company Is Right For Your Business?
If you’re in a business that can accept EBT payments under either the SNAP or TANF programs, there’s really no reason not to sign up for an account. Processing costs are minimal, and most businesses can use the equipment they already have to accept EBT payments. Registering as a SNAP merchant does require some paperwork and the willingness to wait a few weeks for approval, but once you’re registered, you should see increased sales from customers who otherwise might not have a viable payment option other than cash. It’s a win-win situation for both you as a merchant and your local community.
If you don’t already have a merchant account, or your provider doesn’t support EBT payments, you might want to consider an EBT-only option. Most merchant services providers that support EBT payments can set you up with a bare-bones merchant account designed to only accept EBT payments.
This option can save you a considerable amount of money in processing costs and account fees, as you won’t have to pay interchange fees, PIN debit fees, or PCI compliance fees. Some providers will even offer you a “free” terminal to use for as long as you keep your account open.
As we’ve noted above, there aren’t all that many providers that advertise the availability of EBT support or disclose their prices (if any) for EBT transactions. However, the providers we’ve listed above are good all-around choices for both EBT payments and traditional credit/debit cards. For more information about credit, debit, and EBT processing in general, please consult our complete guide to merchant account and credit card processing fees.
You can also check out our guides to the best small business credit card processors and the best credit card machines and terminals for your small business.
FAQs: EBT Processing Companies
In Summary: 5 Best EBT Processors
- National Processing:
- $9.95/month; interchange + 0.18% + $0.10/non-EBT transaction
- EBT processing available, but not advertised
- PaymentCloud:
- $15/month (low-risk accounts); interchange + 0.30% + $0.10/non-EBT transaction (low-risk card-present)
- EBT pricing information not disclosed
- Square:
- $19.95-49.95/month; 2.6% + $0.10/non-EBT transaction (card-present)
- $0.00/EBT transaction
- Dharma Merchant Services:
- $15/month; interchange + 0.15% + $0.08/non-EBT transaction
- $0.10/EBT transaction
- Host Merchant Services:
- $14.99/month; interchange + 0.25% + $0.10/non-EBT transaction
- $0.10/EBT transaction
Frank Kehl
Senior Staff Writer at Merchant Maverick
Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law, and currently resides in Paso Robles, California.
View Frank Kehl's professional experience on LinkedIn.
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