Five state pilot projects will help USDA determine the requirements and resources that would be necessary for participants to use phones, tablets or smart watches to receive their benefits.
The U.S. Department of Agriculture is seeking state agencies to volunteer as partners on pilot programs to test the payment of Supplemental Nutrition Assistance Program benefits via mobile technology.
In a request for volunteers issued last month, USDA said it is looking to partner with state agencies on up to five pilot programs that could allow SNAP recipients to pay for transactions with cell phones, tablets or smart watches, instead of with a physical card. In time, USDA said it “hopes” to incorporate mobile payments as a transaction method for all SNAP recipients through the state agencies it partners with to administer the program to recipients.
The state agencies that apply to participate will be required to submit a detailed plan that includes how they would work with their vendors to implement mobile payments, written agreements with stakeholders and an implementation timeline that includes a strategy on how they will educate and recruit SNAP participants for the pilot.
Vendors and retailers that accept SNAP will be required to work with the state agency to scope the project and determine any technological changes needed to make it a reality.
USDA said there are two predominant payment methods that could be used for pilot programs: near field communication and QR codes. The agency noted that the former method is preferred due to “customer convenience.” The security of recipients’ personal information is paramount, USDA said, as well as ensuring that multiple members from the same household can access the program.
The program is authorized by the 2018 Farm Bill, which requires the Agriculture secretary to allow SNAP recipients to use mobile payments. USDA cited the 2019 Pew Research Mobile Fact Sheet that found that 71% of Americans that earn less than $30,000 a year own a smartphone, ensuring the technology is accessible to most program participants.
USDA also said mobile payment can reduce fraud and allow recipients quicker access to their benefits, although the agency noted the potential for higher data charges, scams and the need to establish trust in a new payment method.
Additionally, mobile payments mean consumers are less easily identifiable as a SNAP recipient, which can reduce stigma at the point of purchase.
USDA’s Food and Nutrition Service will collect and analyze data from the pilot projects and determine the requirements and resources that would be necessary to implement the program across all SNAP states.
SNAP’s online purchasing pilot expanded to 48 states as of last year, and the shift to mobile payments could represent a “new frontier” for the program, according to analysts at Inmar Government Services.
The deadline for applications is Oct. 4, with USDA set to announce participants in December.