Who Administers SNAP: Markets, Vendors, or Both?
Generally, beneficiaries spend their SNAP benefits by swiping a SNAP electronic benefit transfer (EBT) card (like a debit card) at a participating retailer’s point-of-sale (POS) device. The POS devices can accept just EBT cards or can accept EBT, debit, and credit cards. In places where POS devices won't work, a manual voucher system may be used (for more information, click here).
For farmers markets interested in accepting SNAP benefits, a key question to decide is who should become a SNAP-authorized retailer and administer the POS device(s): the market, individual vendors, or both?
There are two different models through which SNAP customers can redeem SNAP benefits from a POS-based transaction.
Market Operated SNAP System
Most commonly, markets operate one centralized POS device for the entire market.Read more »
Vendor Operated SNAP System
Vendors may own and operate their own POS devices, through a process known as "direct marketing."Read more »
How is a vendor-operated SNAP system different from a market-operated SNAP system?
Vendors and markets interested in operating SNAP systems must go through the same application process with FNS to become SNAP-authorized retailers. Once authorized, they must also obtain the same technology to process SNAP EBT payments. However, the operation of this technology is different for vendors and markets:
- Market-Operated: This is currently the most common way that farmers markets accept SNAP benefits. In this scenario, a farmers market applies to FNS to become an authorized SNAP retailer. Once approved, the market purchases or rents a POS device and then operates it at a central location to accept SNAP EBT on behalf of all its vendors that sell SNAP-eligible items.
- Vendor-Operated: Alternatively, a market could forgo a centralized system and encourage vendors to apply individually to the USDA Food and Nutrition Service (FNS) to become SNAP-authorized retailers. Once approved, vendors would purchase or rent their own POS devices and use them to accept SNAP benefits at their booths.
For a further comparison of the two options, see the table below. As you consider your choices, keep in mind that a market or vendor may use one of two kinds of POS devices: one that accepts only SNAP EBT cards, or one that accepts SNAP EBT, debit, and credit cards. It is possible for markets to accept SNAP benefits using only a telephone and paper vouchers, rather than a SNAP EBT card, but this Toolkit focuses mainly on SNAP benefit systems involving the use of EBT cards, as they are the most widespread.
|Market Operated||Vendor Operated|
|Centralized POS Device
The market operates one centralized device on behalf of all vendors selling SNAP-eligible items.
The market pays all relevant equipment costs and fees. Vendors may contribute to these costs through vendor fees or other fees. There may be free SNAP EBT POS equipment available in your state. Check with FMC and/or your state or regional association.
|Personal POS Device
Each SNAP-authorized vendor operates their own POS device, which may not be used to process SNAP EBT payment on behalf of any other vendor.
The vendor pays all relevant equipment costs and fees. There may be free SNAP EBT POS equipment available in your state. Check with FMC and/or your state or regional association.
|Market Currency/Receipt System Required
In a centralized system, a market currency or receipt system is used to facilitate SNAP transactions. Customers receive market currency or a receipt to indicate the SNAP transaction has been made and use the currency or receipt to purchase SNAP-eligible items from vendors, who then return that currency or receipt to the market for reimbursement. Accordingly, the market and vendors must all participate in creating and administering this market-wide system.
Because SNAP customers make payments for SNAP-eligible foods directly to the vendor, no intermediary “scrip” (market currency) system is required.
In a centralized system, the market sets up a reimbursement schedule where vendors may wait a week or more for the market to reimburse them for the scrip they receive from SNAP customers.
Because SNAP customers make payments for SNAP-eligible foods directly to the vendor, there is no need for reimbursement by the market.
Note: It is possible at one market to have both market-operated and vendor-operated systems. In that case, the market as well as vendors would need to follow the requirements of becoming SNAP-authorized retailers and administering a POS device.