Originally posted – Dec 28, 2012
The subject of EBT, or Electronic Benefit Transfer, acceptance has been a topic of discussion that is increasing in frequency among today’s self-service laundry owners. The question of whether this new form of benefits payment can be provided – in the newest forms of alternative payment solutions – is gaining in popularity as the entire economy continues its trend toward a cashless society. Hopefully, this article will provide further insight into this sometimes confusing topic.
Let us first start by answering the question, “What is EBT?”
The Electronic Benefit Transfer is used in all states to issue food stamp benefits to recipients. This is a program that is governed by the United States Department of Agriculture and overseen by the Food and Nutrition Service. The recipients are issued an EBT card, which is similar to a bank ATM or debit card, and is utilized to receive and use food stamp and/or cash benefits. The benefits are automatically deposited into the card account by each state.
Recipients can use their EBT card for eligible food purchases at most grocery stores, as well as some other retail merchants. Those with eligible cash benefits – often referred to as “discretionary funds” – can use their EBT cards like cash for purchases and cash-back with purchases at grocery stores, as well as at most automated teller machines. These cash benefits fall under the TANF (Temporary Assistance for Needy Families) program.
Prospective merchants who wish to accept the EBT card must first set up and activate a USDA eAuthentication account. Once completed, the merchant must then complete the application. This can be done online or through the state’s regional USDA office. The application will be processed by the Food and Nutrition Service, which can take up to 45 days. The FNS reviews all applications for accuracy, conducts a detailed check for any past history, and evaluates the store for eligibility.
What does all of this mean for a potential investor who may be looking for a card-operated store, or to an existing owner who may be looking to add an additional form of payment to his or her coin-operated store?
First, the EBT card is a pin-based form of payment. This means that currently, under the existing regulations, there is not a product available that would allow for acceptance at the machine level. Therefore, there are no devices that can be installed on an individual washer or dryer that will provide for EBT acceptance.
However, card-operated laundry owners may be able to take advantage of these EBT card users. The store owner would first need to have some form of value transfer machine that has the ability to accept pin-based debit card transactions as a means of adding value to the proprietary store card. In addition, they will need to confirm that their merchant processor has the ability to handle EBT card transactions. Even when these conditions are met, it is not a certainty that all EBT recipients will be able to use their card to add value to the store proprietary card. They would need to have sufficient funds available from their discretionary cash benefits portion of their account.
As you can see, this can be a rather confusing subject. Although I don’t maintain to be an expert on this issue, I have attempted to provide today’s laundry owner with a better understanding of the topic. I would encourage store owners who may be interested in further information concerning the EBT card and its acceptance, to contact their regional USDA FNS office.
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