At a subcommittee hearing on 21st century enhancements for the food stamp system, an official from one of the largest electronic payment processors in the world said “large numbers” of recipients “on a fairly frequent basis” suffer network failures when they try to buy food. A USDA spokesman said “outages are rare, and are usually swiftly resolved.”
Steve Mathison, of First Data Corp., told a House Agriculture subcommittee that the government should consider setting standards for network reliability in redeeming food stamps. States administer food stamps and contract with electronic processors to handle food stamp transactions. Since 2004, benefits have been issued solely through electronic benefits transfer (EBT) cards that resemble credit cards.
The networks for processing EBT sales typically do not have as robust back-up systems as banking networks employ, said Mathison. This leads to EBT “cards not working for large numbers of cardholders on a fairly frequent basis. As you can imagine, system-wide outages have negative impacts on (food stamp) recipients by reducing their access to necessary purchases, causing frustration for retailers and cardholders alike, creating inefficiencies and costs, and undermining confidence in the system.”
Most outages are brief. Louisiana had a three-minute interruption at midday in early May that prevented 2,800 sales, said Mathison. Generally, people wait for a couple of minutes and try their EBT cards again, he said. If outages last longer, “they will abandon the shopping cart and just leave.”
In mid-October 2013, a temporary shutdown lasted most of the day and affected food stamps and so-called WIC benefits in 17 states. USDA said the problem was not related to the federal government shutdown. NBC News said, “Officials had advised beneficiaries to use the manual system in the meantime, which meant SNAP (food stamp) customers could spend up to $50 until the system is back online.”
“For most clients, the EBT transaction in an improvement … in making the program more mainstream than before,” when paper coupons were used, said Ellen Vollinger of the antihunger Food Research and Action Center.
During the subcommittee hearing, witnesses described software for mobile devices for keeping track of EBT balances or for transmitting messages about the food stamp program. New York City offers an internet portal that allows residents, among other things, to apply for food stamps and to get re-certified for them. As of May, there were more than 300,000 online accounts for food stamp households, she said. The city also has a mobile app for New Yorkers to manage their food stamp accounts and it lets them submit digital photo of eligibility documents.
The private sector also offers mobile apps so food stamp recipients can check their account balance and recent purchases and receive alerts from program administrators, said Jason Boswell of Conduent, State and Local Solutions Inc. Conduent has its own version of the app, said Boswell, who said the software “lets recipients monitor their account for potential fraudulent use … Additionally the mobile app can be a tool to convey important program information quickly to recipients or could be used to influence spending behavior by offering incentives (e.g. coupons) for healthy food purchases,” he said.
To watch a video of the hearing or to read the written testimony of witnesses and the opening statement of the subcommittee chairman, click here.