USDA proposes chip and tap-to-pay SNAP cards nationwide to curb benefit theft

By Miriam Tolliver

WASHINGTON — The Agriculture Department has proposed requiring every state to replace magnetic-stripe SNAP benefit cards with chip and tap-to-pay cards within two years after a final rule, along with new account protections. The department says the steps are needed to stop thieves from skimming and cloning the cards that about 42 million people use to buy groceries. The proposed rule was published in the Federal Register on Friday.

USDA’s Food and Nutrition Administration says the proposal would “modernize Electronic Benefit Transfer (EBT) technology and align EBT with consumer payment processing industry standards,” and that the changes “will protect SNAP benefits from thieves and ensure benefits are accessible by approved households.” The rule also calls benefit theft “the theft of hard-earned, American tax dollars,” and says the department considers the transition costs “a necessary investment to deter the loss of Federally-funded SNAP benefits.”

Congress ordered the rulemaking. Section 501 of Division HH of the Consolidated Appropriations Act, 2023 directed the department to write regulations requiring state SNAP agencies to adopt security measures against card skimming, card cloning and similar fraud. Comments are due Dec. 22 on Regulations.gov, docket FNS-2025-0137.

What would change

Since 2004, every state has delivered SNAP benefits on EBT cards that work like debit cards. The rule says they still rely on the magnetic stripes and PINs that were standard when states moved off paper coupons in the 1990s. As banks moved credit and debit cards to chips, the department writes, “experienced criminals have turned their attention to EBT cards.”

The main provisions in the proposal:

Magnetic-stripe acceptance would continue for a time. The rule says fallback rules would require shoppers to insert or tap a chip card first. It does not propose rules for mobile-wallet SNAP payments, which remain in a pilot.

Scale and cost

The department says it lacks complete historical data on electronic benefit theft, because states were not required to report it until the 2023 law set temporary reporting and replacement rules. As of the second quarter of fiscal 2025, states had approved 753,929 claims to replace stolen benefits, worth $360,441,561, according to the rule and USDA’s stolen-benefits dashboard. Federal authority to replace stolen benefits expired on Dec. 20, 2024.

In its regulatory impact analysis, USDA puts one-time costs to states, the federal government, households and businesses at roughly $283 million in fiscal 2028–2029. It estimates ongoing costs at $12 million in fiscal 2030 and about $152 million in total through fiscal 2037. The White House Office of Management and Budget reviewed the proposal as economically significant, and it is designated a major rule. According to the department, seven states had issued chip EBT cards as of August 2026, and others are under way, as listed on its EBT modernization page.

ProPublica reported that the rule had been in the works since 2023 and that it was published a week after the outlet’s investigation into SNAP theft. ProPublica wrote that California saw theft of public benefits drop 83% in two years after switching to chip cards. It also quoted current and former officials and state administrators who are worried about how states would pay for the transition; it reported that the Senate’s farm bill includes funding for the changeover and the House version does not. ProPublica reported that White House and USDA officials did not immediately respond to its request for comment on the timing.

Requests for comment

The Inquisitor is seeking comment from the U.S. Department of Agriculture, the American Public Human Services Association, which represents state human services agencies, the National Grocers Association, FMI–The Food Industry Association, and the leaders of the House and Senate agriculture committees. This story will be updated with any responses.

Photo: A farmers market that accepts SNAP benefits. USDA photo by Peter Howard via Wikimedia Commons, CC BY 2.0.