Dive Brief:

• The USDA announced Wednesday its Food and Nutrition Service (FNS) has linked up with five states to pilot mobile payment technology that allows contactless payments for SNAP consumers. 
• The states involved are Illinois, Louisiana, Massachusetts, Missouri and Oklahoma. No retailers were announced for the pilots. FNS will work with state agencies as well as EBT processors, mobile wallet providers, retailers and other stakeholders on the mobile pilot, per the announcement.
• The USDA said that within a few years, those states will have the mobile payment option available for SNAP consumers to use as an alternative to their physical SNAP cards. 

Dive Insight:

Now that SNAP online purchasing is becoming increasingly widespread across the U.S., the USDA is turning its attention towards additional ways to expand payment options for people who receive nutrition benefits.

“Digital wallets are changing the way we pay for everything, including groceries. We want to ensure SNAP leverages the latest technology to improve access to benefits, reduce fraud, and provide a better overall experience for the families we serve,” Stacy Dean, USDA deputy undersecretary for food, nutrition, and consumer services, said in the announcement.

Dean noted that the mobile payment pilot marks the latest way the government agency is “embracing modern and innovative ideas to improve nutrition security.”

The USDA added that it is not requiring retailers or SNAP participants to partake in the pilots. 

The USDA noted that mobile payments are widely considered to be safe and can also protect cardholders from having their benefits stolen because of card skimming and other fraud. Tim Verry, director of family and community Services for the Illinois Department of Human Services, said in the announcement that the mobile pilot will help with fraud prevention by using more secure payment technology.

Mobile payments can also help reduce stigma associated with SNAP benefits and help give shoppers more dignity, Tom Pennington, Oklahoma Human Services financial administrator, said in the announcement.

Louisiana Department of Children & Family Services Secretary Terri Ricks noted that the state has worked over the last few years on several ways to use technology to make SNAP purchasing easier, including through text messaging reminders, a mobile app for managing benefits, online SNAP purchasing and a virtual D-SNAP process after disasters.

“The goal of the Mobile Payment Pilot is to build on these efforts by making purchases more convenient and reducing the time involved in receiving access to benefits,” Ricks said. 

As of November 2022, 42.1 million individuals and 22.2 million households participated in SNAP, according to USDA data. For SNAP online, the number of participating households doubled in January 2022 compared to the same month a year prior. 

Along with the mobile SNAP pilot, work is already underway by the USDA and several states to pilot online purchasing for participants of the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). FNS recently proposed changes that would allow WIC online ordering and people have until May 24 to comment on that proposal.

The USDA has also partnered with the National Grocers Association Foundation to help small food retailers set up SNAP online shopping.