5 Best Merchant Accounts for EBT – Expert Review

Electronic benefits transfer or EBT is an essential part of financial aid to many in the country. Merchants try to find out the best merchant accounts for EBT that can be useful and fast for their business.

Financial aid users can use their federal and state welfare resources to purchase items through the Electronic Benefits Transfer. It is also known as EBT, system. EBT, which was introduced as a replacement for the outdated physical food stamp program, enables customers to swipe magnetic stripe cards at participating merchants in a manner very similar to PIN debit payments.

Simply by swiping the card and entering a personal identification number (PIN), the cardholder can make a purchase or not. The payment is subsequently delivered electronically to the merchant, exactly like with other card transactions.

These are the aid programs financed by the federal and state governments that can be used to purchase food and other items using the EBT (Electronic Benefits Transfer) payment system.

Aid programs that all the best merchant accounts for EBT support

Supplemental Nutrition Assistance Program (SNAP)

The Food and Nutrition Service (FNS) program with the U.S. Department of Agriculture (USDA) is in control of SNAP. This program offers monthly stipends to people and families who require assistance with their food budgets.

Requirements to Qualify as a SNAP Retailer:

The USDA FNS application requests details about your company. Your company must fulfil certain requirements for your SNAP retailer application to be approved. Your company must adhere to one of the following two conditions:

1. You must provide basic foods.
2. At least 51% of your total gross revenue must come from the selling of food products.

You need to memorize several guidelines regarding the acceptance of SNAP and EBT cards. There may be severe repercussions if you disregard the program’s guidelines. The following are the key guidelines:

1. The only food that has been authorized by the SNAP program may be purchased with SNAP payments sent via EBT cards.
2. Cashback cannot be given to cardholders.
3. Refunds can be given, however, they must all be started through the EBT system. A refund cannot be given in cash.
4. The card must be physically swiped or, if the magstripe is inoperable, delivered to the cashier, who will manually enter the card number before the customer enters their PIN on the keypad.

Benefits of SNAP:

SNAP is a program created to assist poor people and families in purchasing food and other supplies essential to maintaining their health. Those who are eligible for SNAP benefits include:

• Being jobless
• Working for low pay or just being able to work part-time due to particular conditions
• Taking advantage of welfare or other payments made possible by government aid schemes
• Aged, handicapped, or homeless

Women, Infants, and Children (WIC) Supplemental Nutrition Program

This program gives pregnant women, mothers, and kids under the age of five a monthly allowance for nutritious foods. Although SNAP payments can be used for food purchases as well, WIC is a little more restricted as there are constraints on the kinds of food that are acceptable, such as peanut butter, eggs, cheese, and cereal.

Requirements to process electronic processing system for WIC (Women, Infants, and Children):

The transaction cannot be split with any other payment types because standalone eWIC terminals can only accept WIC EBT cards. The WIC program will provide funding to retailers who make use of the standalone terminal. Conduent, one of the authorized state processors, provides these terminals. For additional information, see the website for Conduent’s Government Payment Solutions.

Integrated eWIC systems enable eWIC processing without the need for an additional device, using the merchant’s current hardware and software for payment processing. Merchants will be able to accept numerous payment methods per transaction via one terminal by connecting an eWIC-certified solution with their current payment system. They will also benefit from simplified bookkeeping, reconciliations, and inventory synchronizing.

Temporary Assistance to Needy Families (TANF)

With the help of this program, states are given public funding to help low-income families become self-sufficient and financially independent. Receivers must meet minimal requirements, work a minimum number of hours per week, or actively participate in a job service project to be eligible for the program, which is intended to be a temporary helping hand.

Advantages of best EBT Merchant Services 

Before finding out the best merchant accounts for EBT we need to know the advantages of EBT merchant services. EBT cards are frequently misunderstood as being just used for grocery store food purchases. Only SNAP (Supplemental Nutrition Assistance Program) funding, which is meant to assist families in affording essential food necessities, is subject to this.

Cash-type transactions are possible with funds from other government programs including Temporary Assistance for Needy Families (TANF) and state-funded programs. Accordingly, receiving EBT payments from clients may still be advantageous even if you don’t sell groceries.

You can return to focusing on what’s most essential, which is your business when you have a card processing solution that looks out for your best interests. Setting up a merchant account is simple with Choice Funding, and we have pricing plans that guarantee you’re getting the best deals while still maintaining the highest PCI security standards.

The lengthy procedures necessary for the paper food stamp system are avoided by EBT. EBT simplifies the accounting process and reduces the amount of paper handling required for the food stamp program. EBT might help reduce food stamp fraud by getting rid of paper coupons that could be misplaced, sold, or stolen.

Because each food stamp transaction is recorded electronically using EBT, it is simpler to spot and document instances where food stamps are “trafficked,” or swapped for money, narcotics, or other illegal commodities.

The flexibility and security of EBT are popular among recipients. Instead of receiving a month’s worth of benefits at once, they can draw them as needed. If the card is lost or stolen, it can easily be cancelled and replaced and cannot be used by anyone without the PIN.

Most users prefer an EBT system to the paper coupon system, according to surveys. Many users claim that using EBT lessens the stigma attached to using food stamp coupons.

Issues related to EBT processor

While our experts tried to list the best merchant accounts for EBT, the first thing they took into consideration was the issues related to EBT processors.

The Electronic Benefits Transfer (EBT) market faces increased regulation, which makes it difficult for business owners to run their operations. Regulations, limitations, and requirements for merchant account providers might make it harder to run a profitable business.

Finding a processor who will authorize a merchant account to an Electronic Benefits Transfer (EBT) organization is quite difficult because of these several obstacles. For a variety of reasons, banks frequently label Electronic Benefits Transfer (EBT) businesses as high-risk industries.

The majority of merchant processors are not entirely aware of how the business operates. As a result, many banks view them as high-risk clients or refuse to approve them at all. You’ll get approved swiftly through Preferred Financial support!

Our top pick for best merchant accounts for EBT (Electronic Benefits Transfer)

Here is a list of reputable merchant service companies who, in addition to their merchant accounts, also provide EBT processing. Although interchange costs are not applied to EBT payments, processors are still allowed to charge a fair fee for handling EBT transactions. Therefore, before allowing EBT acceptance for your consumers, be sure to get an accurate estimate of all potential expenditures.

Host Merchant Services

We’ve heard a few different methods for setting up EBT processing, but Host Merchant Services provides one of the simplest. The company will add EBT processing to your account after receiving your FNS number.

There is no extra charge per month to implement EBT processing, and businesses that handle more than $20,000 per month in total sales (including EBT and non-EBT transactions) are entitled to a free EMV-compliant terminal.

Long-term commitments and application or account setup costs are not required to get started. If you choose to end your account, there are no early termination fees and billing is on a month-to-month basis.

Here are some important characteristics that make Host Merchant Services one of the best merchant accounts for EBT.

Important characteristics:

Host Merchant Services has a relatively simple setup process for accepting EBT payments, but it also has features like interchange-plus pricing and month-to-month billing that make it a great option for your non-EBT transactions as well.

The following are important characteristics:

1. Both low-risk and high-risk firms can use merchant accounts.
2. No long-term agreements or penalties for ending a contract early
3. Businesses processing more than $20,000 per month qualify for a free credit card terminal.
4. Virtual terminal and payment gateway for Transaction Express
5. Each account includes web hosting.
6. In addition:
7. No startup expenses, no application fees
8. Billing every month
9. zero monthly thresholds
10. Exchange-plus pricing for transactions other than EBT
11. Costly for small-volume retailers

Dharma Merchant Services

In the payments sector, public benefit corporations (B-corps) are relatively uncommon, yet Dharma Merchant Services is one of them. Merchants have nothing but positive feedback to offer about the company’s advertising and sales techniques since they are among the most open and truthful we’ve seen in a while.

Dharma provides a month-to-month billing arrangement with no long-term commitment to all of its merchants. Since all processing rate plans are interchange-plus, you will receive discounts on non-EBT transactions. Although Dharma isn’t the cheapest option available, it will be among the most cost-effective solutions if you process more than $10,000 per month (including both EBT and non-EBT transactions). The corporation also acknowledges openly that smaller companies cannot benefit from its pricing model.

Important characteristics:

Every low-risk firm, including retail and eCommerce merchants, can benefit from the complete spectrum of services provided by Dharma Merchant Services. Important details include the following:

1. Accounts of merchants (underwritten by Fiserv or TSYS)
2. MX Platform for integrated payments by merchants
3. There are several different credit card terminals available, including the Clover Station Duo POS system and Clover Flex.
4. Authorize.net accessible payment gateway

In addition:

1. Excellent sales transparency and very moral business conduct
2. Billing every month with no early termination penalties
3. No yearly charge, no minimum monthly payment
4. Outstanding help and client service
5. Not advised for companies handling less than $10,000 per month in revenue
6. High-risk merchants are not permitted to use this service.

PaymentCloud

One of our top picks for high-risk processing, PaymentCloud also provides reasonable pricing and contract terms for low-risk companies. For high-risk enterprises, overall expenses will certainly be greater, but they’re still relatively affordable. One of the few high-risk processors we’ve identified, PaymentCloud, offers a “free” credit card terminal—in reality, it’s a loaner—and doesn’t charge any setup or application costs to get your account underwritten and authorized. It surpasses the majority of service providers in the payments sector by providing great customer support even after you’ve signed up.

Important characteristics:

It can be extremely difficult for high-risk enterprises to locate a reputable payment processor who will take them on. If you fall into the high-risk group, PaymentCloud is a great option because it provides fair costs and suitable contract conditions. Among the major characteristics are the following:

1. provides both high- and low-risk merchant accounts.
2. payment gateways USAePay or Authorize.Net
3. Processing of ACH & eChecks is provided.
4. With each account, a credit card terminal is offered for “free.”
5. There are POS systems like MaXXPay accessible.

In addition:

1. Trustworthy high-risk expert
2. Fair prices and fees
3. Little if any pricing information has been made available to the public.

National Processing

National Processing will be of great assistance to businesses looking for a trustworthy, reasonable payment processor. You can estimate your average processing costs in advance with a reasonable degree of accuracy thanks to the company’s extensive pricing disclosures on its website. Although you can receive a terminal as part of your account for “free,” we advise purchasing it separately. You must sign a typical three-year contract to accept free equipment, but the firm won’t charge an early termination fee unless you decide to leave them in favour of another provider.

Important characteristics:

National Processing, one of our top picks for any small business, has exceptional pricing transparency and a stellar internet reputation. Among the key characteristics are the following:

1. Accounts with full-service merchants
2. Available Authorize.Net payment gateway for ACH transactions
3. A comprehensive selection of Clover terminals and point-of-sale (POS) devices
4. In addition:
5. With no long-term contract required, monthly billing is offered.
6. Offerings for non-EBT transactions include exchange-plus and membership pricing.
7. An excellent choice for cost-conscious business owners
8. Equipment that is “free” can need a long-term commitment.
9. Choosing “free” equipment may result in an early withdrawal cost.

Square/ TotilPay

TotilPay provides a low-cost, straightforward option that enables you to continue using your current Square account to accept EBT payments. TotilPay integrates with FIS Worldpay merchant accounts as well, however for small businesses, Square is far more cost-effective. Your current Square reader and either the TotilPay Go mobile card reader or the more sophisticated TotilPay Register POS system are required for the integration to function. These devices are available on a monthly subscription basis, which also includes all the unique features that TotilPay provides to help your clients find products that are SNAP and WIC-eligible.

Important characteristics:

Despite being a longtime favourite of small business owners, TotilPay and Square’s partnership to offer EBT payment processing is relatively new. TotilPay offers the following features and lets you accept EBT payments using your current Square account:

1. mPOS app and card reader for TotilPay
2. Month-to-month license with no early termination fees is offered for the TotilPay Register POS system.
3. Features of every Square account are included
4. Real-time reporting and transaction data portal available online
5. Implements end-to-end encryption

In addition:

1. No long-term agreements or penalties for ending a contract early
2. Predictable flat rates for transactions that do not involve EBT (through Square)
3. Transactions using EBT are free of processing fees.
4. Utilizes your current Square account
5. Issues with account stability
6. High-risk merchants cannot use this service.

Equipment required to process EBT card payments

An EBT machine, also known as an EBT point-of-sale machine, is necessary since EBT cards aren’t processed over the same network as other credit or debit cards. Users may still be able to use your present terminal, but it must be configured for PIN debit payments and include a stand-alone PIN pad or a PIN pad built into the terminal.

The encryption keys from your merchant services provider must be programmed into the appropriate hardware once you obtain them. The FNS number on your SNAP permit is all that is required to finish setting up your EBT merchant account.

Users will require a new point-of-sale (POS) system if any current POS device is incompatible with EBT card payments. The following are the most crucial things to consider:

1. Software expenses
2. cost of the terminal
3. The terminal is EBT compatible.

Although most POS terminals come with free software, the terminal hardware may be costly. Before making a purchase, always double-check the price and make sure the terminal has the characteristics you require for your particular line of work. Even if a terminal has several fascinating features, if those features aren’t useful for your business, you can probably do without spending the extra money.