USDA Proposal Would Require Chip and NFC Security for SNAP EBT Cards

The U.S. Department of Agriculture (USDA) has proposed a rule requiring state agencies that administer the Supplemental Nutrition Assistance Program (SNAP) to issue electronic benefit transfer (EBT) cards enabled for chip and near-field communication (NFC) transactions. The proposal would also require retailers to accept chip and NFC EBT transactions. USDA’s stated goal, as described in the source coverage, is to curb fraud through stronger EBT card security requirements. Because the proposal remains under consideration, the requirements are not yet final and do not represent an active solicitation or award.

If finalized, the rule could prompt coordinated changes across state benefit programs and retail payment environments. State agencies may need to assess card issuance arrangements, technology and vendor dependencies, implementation schedules, and support for cardholders. Retailers could face point-of-sale (POS) equipment or software changes, payment acceptance testing, staff readiness, and operational support needs. Payment processors, card issuers, systems integrators, and customer-support providers may therefore see potential work tied to implementation, although the proposal itself does not identify vendors, contract vehicles, or procurement dates.

USDA estimates $283 million in one-time costs across states, the federal government, households, and businesses during fiscal years 2028–2029. The estimate is a combined cost figure, not a stated procurement budget, and USDA has not specified how expenses would be allocated among those groups. That funding uncertainty is material for contractors: the eventual scale and timing of opportunities may depend on final requirements, state implementation capacity, federal support, retailer readiness, and how costs are distributed. Businesses should avoid treating the aggregate estimate as guaranteed addressable contract spending.

The immediate procurement-relevant action is to evaluate the proposed technical and operational requirements during the public comment period. Comments are due December 22, 2026—49 days after November 3, according to the supplied reporting. State agencies, payment providers, card issuers, retailers, and prospective contractors can use this period to identify integration constraints, implementation risks, accessibility and customer-support considerations, and cost-allocation questions. Feedback could inform the final rule, so market participants should distinguish the current proposal from requirements that USDA ultimately adopts.

• Proposed requirement: State SNAP agencies would issue EBT cards enabled for chip and NFC transactions; retailers would be required to accept those transactions.
• Agency lead: The U.S. Department of Agriculture is proposing the rule; the supplied agency list also identifies the Food and Nutrition Service.
• Security objective: USDA is seeking to curb fraud through EBT card security requirements, as characterized in the cited coverage.
• Estimated cost: USDA estimates $283 million in one-time costs across states, the federal government, households, and businesses.
• Timing: The estimate covers fiscal years 2028–2029; these are projected costs, not announced contract spending.
• Potential work areas: Card issuance, payment processing, POS upgrades, transaction acceptance, implementation support, and customer service could be affected if the rule is finalized.
• Funding caveat: USDA has not specified how the estimated costs would be allocated, making state budgets and implementation capacity important uncertainties.
• Comment deadline: Interested agencies, providers, retailers, and contractors can submit feedback by December 22, 2026.
• Market posture: Treat this as an emerging regulatory and technology-planning signal—not an active RFP, vendor selection, or award.