Flipping the Model for EBT Transactions with QR Codes by Naveen Nukala
July 5, 2018
Naveen Nukala, FIS | General Manager- Government Solutions/EBT, IFS
QR codes – those indecipherable, black and white pixel patterns that represent codes – have been the focus of jokes for years as they struggled to catch on in the United States. However, they may be the perfect solution to deliver fresh produce and other healthy foods to families using electronic benefits transfer (EBT).
The Payment Obstacle to Fresh Foods for EBT Recipients
An important goal of the Supplemental Nutritional Assistance Program (SNAP) is expanding access to fresh produce and other healthy foods, according to the USDA. Farmer’s markets help to achieve this goal, but payment is often an obstacle. Since many farmers and other small food merchants don’t have a device that acceptsEBT cards, payments must be made in cash, which typically means a trip to an ATM for the cardholder. However, an ATM may charge as much as an average day’s food allowance when an EBT user wants to withdraw cash.
Lessons from Emerging Payment Technologies in India
In India, where there is a focus on moving towards an almost cashless society, QR codes have become an increasingly popular way to pay merchants, especially those who lack payment acceptance devices. That’s because QR codes flip the payment model from merchant-controlled to consumer-controlled.
India’s PayTM QR codes demonstrate how this works: PayTM QR codes enable merchants to accept PayTM, United Payments Interface (UPI) and card payments on a mobile platform. Merchants simply call or log-on to the business PayTM site, click on the “sign up for free” button, enter their name and PAN or Aadhar number and fill in business and bank details. Indian merchants typically display their printed QR code on their booths or stores near the cash wrap.
Consumers control the transaction with their mobile devices. They simply load the PayTM app onto their smartphone. When they make a purchase, they scan the QR code to identify the merchant and enter the amount of the payment, which is instantly transferred into the merchants’ bank accounts.
How QR Codes Could Reduce Friction in US EBT Payments
Naveen Nukala brings over 20 years of financial and payments industry experience to FIS through product development, implementations, operations and management roles of which most of the experience in the area of Government Benefits (EBT – SNAP, WIC, TANF, Child Care). Currently, he is responsible for Government line of business at FIS.
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