Report on the Feasibility of an Electronic Benefit Transfer System for the Food Stamp Program

Excerpt from the Executive Summary: The Department of Agriculture's Food Stamp Program, amounting currently to $10.3 billion annually, has become a growing target of fraud and abuse. Current issuance procedures do not always operate efficiently, causing additional loss through assessment of alternative methods of issuing food stamp benefits to determine how these problems might be addressed. One method under consideration is use of electronic funds transfer technologies as a means for transferring program benefits. Called an electronic benefit transfer (EBT) system, the system would replace paper food stamp coupons with electronic impulses as the medium of exchange in the transaction of benefits. These impulses can be transmitted from central files over a communications network linking the file to retail stores or can be carried by program participants in a plastic card which is inserted into special terminals at the food store. While an electronic benefit transfer system would cause a significant change in the operations of the existing paper-based food stamp issuance systems, the character of the Food Stamp Program itself would not change significantly