Payment technology innovations have remade the checkout experience in the past decade. The proliferation of intuitive, user-friendly and affordable mobile point-of-sale (POS) solutions, have empowered SMBs by allowing them to expand their presence physically and digitally without compromising on the customer experience. Advancements in the $70 billion electronic benefit transfer (EBT) payments space, however, have largely been overlooked by POS providers.
The ability to accept EBT payments affects a business of any size, but it can have an especially powerful impact on SMBs. Over 45 million low-income Americans receive and use monthly benefits to buy produce and other healthy food at grocery retailers and farmers markets. Accepting EBT payments broadens a business’s customer base and boosts their bottom line. It is also a great way to support the greater community and facilitate the purchase fresh, nutritious food items in a convenient way.
The use of mag-stripe debit cards by the Supplemental Nutrition Assistance Program (SNAP) streamlines the issuance of EBT and eliminates manual processes, recordkeeping errors, slow checkouts and social stigma for recipients. By October 2020, The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) will join the modernized EBT delivery process of by completing rollout of its EBT cards nationwide.
While most national retail chains integrate EBT payments into their POS systems, SMBs haven’t had as much choice. Of the 256,000 plus merchants eligible to accept SNAP across the country, many of the smaller grocers and convenience stores have had to resort to a disparate array of complex and expensive solutions.
Legacy terminals: double the hardware, half the efficiency
Legacy EBT terminals – that are nothing like the streamlined versions we see from Square and others today – still dominate the EBT payment acceptance scene among SMBs. To accept EBT, SMBs have had to layer separate, antiquated and expensive POS terminal on top of their systems, which results in juggling multiple card readers, paying additional costs for software and hardware, and hurting check-out efficiency.
Managing multiple POS systems are also quite tedious in the back office. Considerations that require double the effort include time spent training employees on securely accepting credit card payments on each POS system as well as keeping up with regulatory requirements. Since SNAP acceptance has specific reporting rules, merchants must also consider how to accurately report via two separate POS systems. This may require significant manual input, which is not only time-consuming but prone to human error. This is a step that cannot be overlooked; violating the rules of SNAP acceptance can result in fines or disqualification from the program. More often than not, merchants attempt to process EBT payments in an ad hoc manner that increases the probability for errors and fraud and puts merchant compliance at risk.
Payment technology streamlines EBT operations
SMBs that accept EBT now have the option to replace legacy systems with innovative, all-in-one POS solutions that accept EBT payments and other tender types with minimal friction. Modern EBT POS solutions that simplify checkout efficiency by automatically matching program-eligible items are here. They eliminate the need for multiple POS terminals and save on valuable counter space that is better used to maximize sales. A seamless checkout experience translates to better customer and staff retention through fast and easy checkout for customers and a simplified way for staff to scan items and accept payment.
They also offer all the features and benefits that come with a smart POS terminal, such as giving consumers the option to print, email or text consumer receipts. Some are also third-party processors for SNAP and WIC transactions. That way, SMBs do not need to worry about opening separate merchants accounts and can receive quick and regular settlement to their bank accounts.
POS terminals for SMBs have improved dramatically in the last decade by simplifying payment acceptance. It is time that the payments evolution also includes smaller supermarkets, convenience stores and bodegas who accept EBT. Adopting a modern POS solution that accepts all payments, including SNAP and WIC, provides benefits to the merchants, the consumer and the wider community.