The EBT Scare, Panic, and the Lesson
Over the weekend you no doubt heard about the EBT outage that bright the system to a halt. If you don’t know what EBT is, it means “Electronic Benefits Transfer” and is the electronic version of the “Food Stamp Program.” So, this means that instead of receiving paper food stamps and paper checks, you are issued a debit card called the EBT Card to purchase food products and access cash benefits by your state government.
All states have systems that use magnetic stripe cards and “on-line” authorization of transactions. When paying for groceries, the customer’s card is run through an electronic reader or a point of sale terminal (POS), and the recipient enters the secret PIN to access the food stamp account. Then, electronically, the processor verifies the PIN and the account balance, and sends an authorization or denial back to the retailer. The recipient’s account is then debited for the amount of the purchase, and the retailer’s account is credited. No cash money changes hands. Payment is made to the retailer through an ACH settlement process at the end of the business day. Most states’ online EBT systems are interoperable through the Quest network, which is sponsored by the Electronic Benefits and Services Council (formerly the EBT Council) of NACHA.