NGA and FMI Support the EBT Act to Prevent Transaction Fees for SNAP Recipients and Retailers

Congresswoman Shontel Brown (OH-11) has introduced the Ensuring Fee-Free Benefit Transactions Act (EBT Act) new legislation to protect Supplemental Nutrition Assistance Program (SNAP) retailers and beneficiaries from transaction fees.

Congresswoman Brown’s legislation would ensure that retailers are only responsible for their own costs as the federal government modernizes the Electronic Benefit Transfer (EBT) system with chip cards, mobile payments, and other payment upgrades.

The EBT Act (H.R. 4103) is cosponsored by Congressman Earl Blumenauer (OR-03) and Congresswoman Sara Jacobs (CA-51) and is supported by the National Grocers Association and FMI – The Food Industry Association.

“In communities like Cleveland, many SNAP recipients rely on local, independent, and small grocery retailers to purchase fresh, affordable foods for their families,” said Congresswoman Shontel Brown.

“In OH-11, where nearly 1 in 4 households receive SNAP benefits, we need to ensure that these retailers continue to participate in this vital program. The EBT Act will permanently close a loophole that subjects retailers to processing fees on SNAP transactions. These extra costs to businesses could force many small, minority, or family-owned independent retailers to stop accepting SNAP or raise their prices, both of which would be extremely harmful to my constituents in Northeast Ohio and people across the country,” the congresswoman noted.

Related Article: NGA Launches SNAP Online Purchasing Toolkit to Help Independent Grocers

The EBT Act would make permanent a temporary protection from new transaction fees first established in the 2018 Farm Bill.

Without legislative action, that provision will expire this year, potentially leading to increased costs or a two-tiered payment system that would discourage retailers from participating in SNAP and burden consumers.

The NGA, the national trade association representing the independent supermarket industry, applauded the introduction of the EBT Act.

“Independent community grocers are essential partners in SNAP, providing access to nutritious and affordable foods for American families in need. Retailers invest significant capital for the software, equipment, and training to provide SNAP benefits for their communities,” said Greg Ferrara, NGA president and CEO.

“NGA was pleased to work with Congresswoman Brown on finding a permanent solution to prevent processing fees on SNAP transactions, which could result in limited access to SNAP for beneficiaries and negatively impact the retailers who are indispensable to the program,” Ferrara added.

NGA warns that fees on EBT transactions will be cost-prohibitive for many community and family-owned grocers that service urban, rural, and high-need areas. The passage of the bill would protect retailers from such processing fees.

Additionally, this bill ensures that retailers are only responsible for their own costs as USDA works to modernize EBT with chip cards and mobile payments. The modernization will increase costs for all participating parties, including the federal government, states, EBT processors, and retailers, but each party must pay their share of the costs and not pass them down to SNAP retailers. It is critical that we ensure these fees and costs are not passed on to retailers so that they can continue to support their communities.

For her part, Jennifer Hatcher, Chief Public Policy Officer and Senior Vice President, Government & Public Affairs, FMI – The Food Industry Association, said: “FMI greatly appreciates Congresswoman Brown’s leadership in introducing the Fee-Free EBT Act to permanently protect grocery retailers who participate in SNAP from any processing or other related fees for EBT transactions.”

“These fees have never been imposed on retailers, and the Congresswoman’s bill will ensure none ever will be imposed. The Fee-Free EBT Act ensures access for SNAP participants and shelters retailers, and consumers from the unfair burden of fees. We are proud to work with Congresswoman Brown and other Members of the Agriculture Committee in enacting the Fee-Free EBT Act as part of the Farm Bill reauthorization,” Hatcher added.

Congresswoman Brown is a Ranking Member of the House Committee on Agriculture Subcommittee on General Farm Commodities, Risk Management, and Credit.