Decade’s old security feature coming soon to USDA food security payment cards
USDA supports farmers and the nation’s food security through programs such as the National School Lunch Program; School Breakfast Program; Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); and perhaps the best known, SNAP. The Supplemental Nutrition Assistance Program is funded by the feds and largely administered by the states. The program’s supporting benefit cards (EBT) are also state contracted and issued, but the cards themselves are federally standardized.
And so, reports NextGov, USDA is quite late in advancing plans to follow the private-sector’s so called EMV liability shift to secure the cards against fraud (the carrot) by replacing magnetic stripes with chips by making merchants responsible for fraudulent charges when they swipe a card’s magnetic strip that has a chip (the liability shift, or stick). This addresses previously common “skimming,” where the magnetic stripe is copied to another card, costing SNAP recipients nearly $95 million since early 2023. It has also pushed most credit card fraud online.
The issue directly affects card users, who have not always been reimbursed for stolen funds comprising SNAP benefits and also TANF, the cash assistance program available only to families.
SNAP lacks interchange fees that support commercial card updates, and USDA is covering only half of state implementation costs. Meanwhile, mobile payment pilots in Illinois, Louisiana, Massachusetts, Missouri, and Oklahoma suggest both mobile pay and chip cards will eventually support SNAP benefits.
The new chip card standards, developed in August, allow states and EBT vendors to move forward, with California and Oklahoma set to deploy the technology by summer 2025, while New York and others are in earlier stages. The credit card issuers coordinated to launch the EMV shift in 2015, with a compliance deadline of 2021. Everyone from Walmart to neighborhood corner stores and carryouts complied.
On Capitol Hill, Sen. Ron Wyden has pushed for stricter anti-fraud card technology, while Rep. Dutch Ruppersberger seeks permanent reimbursement protections for SNAP users affected by fraud.