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What Are Electronic Benefits Transfers?

Electronic Benefits Transfer, or EBT for short, is a method that is used to distribute certain types of federal benefits to people living in lower income households. Usually, these EBT benefits come in the form of either food stamps or cash sums. Food stamps are part of a federal program named SNAP. SNAP stands for Supplement Nutrition Assistance Program.

Today, EBT works a lot like a debit account. The government deposits the payment into an account. The beneficiary is then provided with a card that can be used to spend it. However, not all stores can process EBT payment. It must be done through a store that has credit card processing software installed and merchant accounts set up to accept EBT payment.

In the past, low income people that received government benefits had to use checks or actual paper stamps. This has been phased out for debit accounts that are designed to work with the credit card processing procedures and retail accounts of stores. Like regular debit cards, they can simply be swiped by a card reader while checking out. The customer will then be prompted to enter a pin code before the transaction is approved and completed.

This method of distributing benefits is far more efficient than the previous methods implemented by the government. It removed the need for much of the work previously required to create and mail payment to beneficiaries. This is due to the fact that most of the process has been automated and digitized. This has lowered administrative costs and saved paper.

EBT also has the benefit of removing some of the shame felt by individuals who had to use stamps as payment. An EBT card is far less obvious to others who may be in a checkout line. Food stamps distributed via EBT are traditionally used at supermarkets and grocery stores. However, other food based marketplaces such as farmers’ markets have also begun accepting EBT as payment.

EBT can also be used to distribute cash benefits that can be used to purchase more than just food items. TANF, which stands for Temporary Assistance of Needy Families, is one such program. This program gives grants to different states that then distribute funds to at risk families in the form of EBT. EBT is also sometimes given to refugees in the United States as a means of helping them settle into US life before finding gainful employment.

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