NATSO, SNAP Retailers Oppose Additional Processing Fees

NATSO joined eight trade associations representing thousands of food retailers in urging Congress to reject recent proposals to impose new processing and credit card swipe fees on Supplemental Nutrition Assistance Program (SNAP) authorized retailers as higher costs and administrative complexities threaten their ability to provide affordable food to vulnerable Americans.

Current federal law prohibits the imposition of swipe or interchange fees on SNAP transactions, however, a major credit card brand is asking Congress to lift that legislative prohibition, which has been in place since 1980. Additionally, a state SNAP Electronic Benefits Contractor (EBT) is attempting to charge authorized retailers a fee to process SNAP transactions.

In a letter to the House and Senate Committees on Agriculture, the trade groups asked Congress to oppose those efforts and to clarify in the upcoming Farm Bill that no state contractor or subcontractor is authorized to impose fees on any SNAP retailer or that retailer’s contracted payment acquirer.

Along with NATSO, signatories included the Food Marketing Institute Merchant Advisory Group, National Association of Convenience Stores, National Grocers Association, National Retail Federation, Petroleum Marketers Association of America, Retail Industry Leaders Association and the Society of Independent Gasoline Marketers of America.

SNAP retailers invest significant capital for equipment, software and employee training to accept SNAP. If card networks were allowed to charge the average debit interchange of 48 cents a transaction, it would, on a conservative estimate, translate into a cost of $1.3 billion a year for the retail community to accept SNAP payments.

Further increasing the costs for retailers to process EBT transactions ultimately could drive retailers from the program, threatening SNAP access for participants and leading to higher food costs in participating stores.

The groups also disputed claims by the credit card brand that additional security measures were needed on the SNAP program through the use of chip cards. Currently, every SNAP transaction requires a personal identification number, rather than a signature. PIN technology is six times more secure than signature and allowing card networks to prevent retailers from requiring PIN authentication would allow card brands to extract more money from merchants.

Tiffany Wlazlowski Neuman's photo

Tiffany Wlazlowski Neuman

Tiffany Wlazlowski Neuman develops and executes communications strategies to advance NATSO’s public relations and advocacy goals. Tiffany also develops and oversees partnerships related to the NATSO Foundation’s public outreach initiatives. Tiffany lives in the D.C. metro area with her husband and their two sons.More
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