How To Accept EBT Payments: 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
Last updated onUpdated
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REVIEWED BY
Lead Staff Writer
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 you’ll need to 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?
- How The Best EBT Payment Processors Compare
- 5 Best EBT Processors
- National Processing: Best For "Free" Processing Equipment
- PaymentCloud: Best For High-Risk Merchants Accepting EBT
- Square: Best For Startups Or Seasonal Businesses
- Dharma Merchant Services: Best For Nonprofits That Need To Accept EBT
- Host Merchant Services: Best For Omnichannel Businesses That Accept EBT Payments
- 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
Table of Contents
- What Does EBT Processing Include?
- How The Best EBT Payment Processors Compare
- 5 Best EBT Processors
- National Processing: Best For "Free" Processing Equipment
- National Processing
- National Processing Features
- National Processing Pricing
- PaymentCloud: Best For High-Risk Merchants Accepting EBT
- PaymentCloud
- PaymentCloud Features
- PaymentCloud Pricing
- Square: Best For Startups Or Seasonal Businesses
- Square
- Square/TotilPay Features
- Square/TotilPay Pricing
- Dharma Merchant Services: Best For Nonprofits That Need To Accept EBT
- Dharma Merchant Services
- Dharma Merchant Services Features
- Dharma Merchant Services Pricing
- Host Merchant Services: Best For Omnichannel Businesses That Accept EBT Payments
- Host Merchant Services
- Host Merchant Services Features
- Host Merchant Services Pricing
- Payment Processing Rating Methodology
- 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
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.
How The Best EBT Payment Processors Compare
| Vendor | EBT Processing Fee | Credit Card Processing Fee | Hardware Cost |
|---|---|---|---|
| National Processing | Not disclosed | $12-$19+/month | “Free” terminal available |
| PaymentCloud | Not disclosed | $15/month (low-risk accounts) | “Free” terminal available |
| Square/TotilPay | $19.95-$49.95/month | $0/month (Square Free plan) | $59 – Square Tap + Chip Card Reader |
| Dharma Merchant Services | $0.10/transaction | $15/month ($12/month for nonprofits) | $480 – Terminal + external PIN pad |
| Host Merchant Services | $0.10/transaction | $14.95/month | “Free” terminal available |
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:
- National Processing: Best For "Free" Processing Equipment
- PaymentCloud: Best For High-Risk Merchants Accepting EBT
- Square: Best For Startups Or Seasonal Businesses
- Dharma Merchant Services: Best For Nonprofits That Need To Accept EBT
- Host Merchant Services: Best For Omnichannel Businesses That Accept EBT Payments
National Processing: Best For "Free" Processing Equipment
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 is chosen
Why National Processing Is The Best Choice For "Free" Processing Equipment
Merchants looking for an honest, affordable payment processor will be well-served by National Processing. The company offers extensive pricing disclosures on its website, allowing you to estimate your average processing costs in advance with reasonable accuracy. While you can get a "free" terminal as part of your account, you must agree to a standard three-year contract. However, the company only enforces its early termination fee if you switch to a competing provider. For many businesses, this will be a worthwhile trade-off.
Information about EBT payments is available on National Processing's company blog, but doesn't include specific pricing details. You'll want to confirm with your sales agent whether a per-transaction fee is required.
Get Started With National Processing
PaymentCloud: Best For High-Risk Merchants Accepting EBT
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
Why PaymentCloud Is The Best Choice For High-Risk Merchants Accepting EBT
PaymentCloud is one of our top choices for high-risk processing, but it also offers affordable pricing and fair contract terms for low-risk businesses. While overall costs will inevitably be higher for high-risk businesses, they're still quite reasonable. PaymentCloud is one of the few high-risk processors we've found that offers a "free" credit card terminal (actually a loaner) and doesn't charge any application or setup fees to get your account underwritten and approved. It also offers excellent customer service after you've signed up, putting it ahead of most providers in the payments industry.
Note that beyond a blog post on the subject, PaymentCloud doesn't discuss EBT processing on its website. You'll have to confirm details with a sales agent before signing up.
Square: Best For Startups Or Seasonal Businesses
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
Why Square/TotilPay Is The Best Choice For Startups Or Seasonal Businesses
TotilPay offers an affordable, simple solution that allows you to use your existing Square account to accept EBT payments. While TotilPay also integrates with FIS Worldpay merchant accounts, it won't be nearly as affordable for small businesses as using Square. You'll need two card readers to make the integration work, including your existing Square reader and either the TotilPay Go mobile card reader or the more advanced TotilPay Register POS system. These devices are offered on a monthly subscription basis, which also includes all the special features TotilPay offers to identify SNAP and WIC-eligible products for your customers.
While TotilPay might be a somewhat expensive way to add EBT processing to your payments arsenal, using it with a Square account will be more affordable for many small businesses than paying for a full-service merchant account. Note that discounts are available to certified farmers' markets and businesses willing to pay their subscription fees annually instead of monthly.
Dharma Merchant Services: Best For Nonprofits That Need To Accept EBT
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
Why Dharma Merchant Services Is The Best Choice For Nonprofits That Need To Accept EBT
Finding a public benefit corporation (B-corp) in the payments industry is extremely rare, but Dharma Merchant Services is just that. As such, the company’s advertising and sales practices are among the most transparent and honest we’ve ever seen, and merchants have nothing but good things to say about it.
Dharma offers all its merchants a month-to-month billing agreement with no long-term commitment.
Processing rate plans for non-EBT transactions are all interchange-plus. Dharma isn’t the least expensive option out there, but if you process more than $10,000 per month (including both EBT and non-EBT transactions), it will be one of the most cost-effective options you can find.
The company also freely admits that its pricing structure isn’t a good fit for smaller businesses. If you process less than $10,000 per month, Dharma recommends Square as a lower-cost alternative. Also, you should be aware that the company does not accept high-risk merchants.
Get Started With Dharma Merchant Services
Host Merchant Services: Best For Omnichannel Businesses That Accept EBT Payments
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
Why Host Merchant Services Is The Best Choice For Omnichannel Businesses That Accept EBT Payments
With a free payment gateway and free web hosting included with every merchant account, Host Merchant Services is a great choice for vendors that want to be able to offer online ordering for pickup or delivery.
The company can easily add EBT to your account once you provide your FNS number. There's no additional monthly fee to add EBT processing, and merchants who process over $20,000 per month (including both EBT and non-EBT sales) will qualify for a free EMV-compliant terminal. There are no application or account setup fees and no long-term contracts. Billing is on a month-to-month basis, and there’s no early termination fee if you decide to close your account.
Note that while specific pricing information is no longer listed on the Host Merchant Services website, the company has offered interchange-plus pricing for non-EBT transactions exclusively for many years. The pricing listed below represents the most recent information available.
Host’s interchange-plus rates for non-EBT transactions are not the lowest we’ve seen. The company discloses a standard rate of interchange + 0.25% + $0.10 per transaction for non-EBT retail transactions, but you’ll need to process at least $10,000 per month to get this rate. Rates for lower-volume businesses aren’t disclosed but typically run around interchange + 0.50% + $0.10 per transaction. For some low-volume businesses, this will be more expensive than simply signing up with Square.
Get Started With Host Merchant Services
Payment Processing Rating Methodology
Merchant Maverick has been researching the payment processing industry since 2009. Our writers have reviewed hundreds of credit card processors, merchant account services, and mobile payment apps, evaluating each provider carefully on several different metrics.
When comparing different payment processing companies and applications to one another, we consider numerous data points. Our experts start by comparing credit card processing rates, the presence of additional fees, contract length, sales practices, and the presence or absence of additional features and services, like point of sale software. Each provider is judged on its own merits and how well it stacks up to industry standards; then it is weighed against the other providers on the list.
We spend an average of 10-15 hours researching and updating each one of our lists, making sure every company or application included meets our internal standards for quality and reputation. Any list of recommended payment processors on our site might contain a mix of standard merchant accounts, third-party payment processors, mobile payment devices, and high-risk payment processors, depending on what our expert feels is the best fit for certain scenarios or business types.
For additional details about Merchant Maverick’s review and rating processes, please refer to any or all of the following methodology pages:
- Credit card processor rating criteria
- High-risk merchant account rating criteria
- Credit card reader & mobile payment device rating criteria
15
Years reviewing payment processors
100+
Providers evaluated
25
Attributes and features assessed per vendor
40+
Years combined experience
How Much Does EBT Processing Cost?
Because the US government sponsors the EBT program 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 no interchange fee needs to be passed on with EBT transactions.
You should also know that PCI-DSS compliance requirements do not apply to EBT transactions. This won’t make a difference for most merchants who accept EBT and traditional debit/credit card transactions. However, if a merchant account is set up only to accept EBT payments, you should not be charged any PCI compliance fees.
The SNAP EBT Third Party Processor (TPP) List and Guidance to Retailers lists 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 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?
A fair amount of paperwork is required before you can accept EBT payments, but the 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. First, you must obtain a permit (usually called 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.
If you’re qualified, go to the How Do I Apply to Accept Benefits? page on the FNS website. 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, fill out and submit 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 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 and mailed to the FNS. In either case, the approval process can take as long as 45 days. 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, your processor must reconfigure your processing equipment to accept SNAP payments.
Here are some additional considerations regarding SNAP permits:
- In addition to traditional grocery stores, SNAP permits are issued to qualified farm stands and farmers’ markets.
- You cannot use the online application process if you’re a Multiple Store Owner (MSO). 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 prohibited. (Note that some of these items may be purchased with TANF funds.)
You’ll want to be familiar with numerous special rules that apply to SNAP payments. 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 operated for several years to allow online grocery purchasing and delivery using EBT benefits. The program is available in all 50 states and the District of Columbia. Note that EBT benefits can only be used to purchase approved items and not to cover delivery fees, tips, etc.
Which EBT Processing Company Is Right For Your Business?
If your business can accept EBT payments under either the SNAP or TANF programs, there’s no reason not to sign up for EBT processing. Transaction processing costs are minimal, and most businesses can use the equipment they already have to accept EBT payments. Registering as a SNAP merchant requires some paperwork and the willingness to wait a few weeks for approval. However, once 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 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 lot 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 for as long as you keep your account open.
As we’ve noted above, not many providers advertise the availability of EBT support or disclose their prices (if any) for EBT transactions. However, the providers listed above are good choices for 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
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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