US Department of Agriculture to trial NFC and QR mobile payments for contactless state benefits

US Department of Agriculture Supplemental Nutrition Assistance Program (SNAP) cards for state benefit transactions
PILOT SCHEME: The USDA is testing mobile payments technology to replace physical SNAP payment cards

The US Department of Agriculture (USDA) is to run a series of pilot schemes to test the use of mobile payments technology to enable citizens entitled to financial support under its Supplemental Nutrition Assistance Program (SNAP) to receive benefits and make NFC or QR code payments for eligible purchases on their mobile device.

USDA plans up to five pilots in partnership with state agencies that would allow SNAP recipients to pay for bread, fruit, vegetables and other essential foodstuffs at authorised merchants with their smartphone, tablet or smart watch rather than using their existing physical SNAP payment card.

USDA is currently seeking state agencies to participate in the pilots and has issued an official request for volunteers that details the technical, security and operational requirements for a mobile benefit payments system and identifies NFC and QR codes as the two “predominant methods used to conduct mobile payments” that it intends to test.

The document also identifies the benefits of using mobile payments for SNAP transactions and states that more than seven in ten American consumers entitled to SNAP payments have a device capable of supporting this type of payment.

Mobile benefits

“When a customer uses mobile technology to pay, the method of payment is not identified at the time of a mobile payment transaction. Therefore, the customer is not easily identified as a SNAP recipient, which can reduce stigma at the point of purchase,” USDA says.

“Mobile technology offers widely used payment options for recipients that can offer high levels of fraud protection through multi-level authentication strategies, recipient budget and management support because of real-time access to benefit information, and safe storage of receipts.

“In addition, mobile technology will allow SNAP recipients faster access to their benefits. Upon approval, loaded benefits accessible through the SNAP cardholder’s phone mitigates the card access issues occurring with long postal delays to receive cards in the mail. The SNAP recipient will still receive their physical card in the mail; however, through the use of mobile technology they will have access to their benefits days and weeks sooner than they would now.

“A final benefit for SNAP recipients identified during the research phase of this project is convenience, as the use of a mobile device to pay for goods and services leaves the customer with one less card to keep track of and carry around.”

USDA plans to announce which state agencies are to participate in the pilot schemes in December. 

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