Why It Matters
Households that receive federal food assistance would face new SNAP EBT security requirements under a USDA proposal to replace magnetic-stripe benefit cards with chip-and-tap technology.
The rule would reach approximately 42 million Supplemental Nutrition Assistance Program (SNAP) recipients, according to USDA's estimate, and would require all 53 state SNAP agencies and authorized retailers to complete the transition within two years of a final rule's publication.
NPR, citing a USDA estimate, reported that the changes could reduce stolen benefits by at least $1.5 billion over 10 years. The proposal carries out a directive in the Consolidated Appropriations Act, 2023 (Public Law 117-328), which instructed the Secretary to require state agencies to take security measures against card skimming, cloning, and similar fraud.
The National Grocers Association backed the chip-card requirement; its government-affairs head Stephanie Johnson said states that had already adopted chip cards had seen a significant drop in skimming fraud. NACS, the convenience-store trade group, said it had long supported chip technology for EBT, with government-relations director Margaret Mannion backing the proposal as a way to modernize security and make benefits easier to use. The record contains no named opposition.
The Broader Context
Today, 7 C.F.R. § 274.1 permits states to issue benefits through either an online EBT system or an offline system storing balances on the card. The proposed text would replace that classification with "Reserved" and add a sentence to paragraph (a) stating that "issuance systems shall not rely on EBT cards which conduct transactions solely with magnetic stripes."
The current text requires states to make up to two calendar months of transaction history available on request; the proposed revision would extend that to 12 months and add a new paragraph (k) requiring states to offer card freezing, blocking of out-of-state and card-not-present transactions, transaction amount limits, and activity alerts.
As of August 2026, at most seven of the 53 state agencies had already issued chip cards. States not yet upgraded must still support a magnetic-stripe fallback during the transition, but the rule would require a chip or NFC transaction to be attempted first; magnetic-stripe use could not be initiated until at least one chip or NFC attempt had failed. All new cards would also carry a three-digit security code printed on the back, issued inactive and activated by the household before use.
The proposal would also end a manual-voucher exemption in place since a March 21, 2014 implementing memorandum and require retailers currently using manual vouchers as their primary method to transition to mobile point-of-sale devices.
USDA estimates one-time implementation costs across state agencies, the federal government, households, and businesses at roughly $283 million in fiscal years 2028 and 2029, with ongoing costs of roughly $152 million over fiscal years 2028 through 2037. As of the second quarter of federal fiscal year 2025, 753,929 claims for replacement of stolen SNAP benefits had been approved, totaling $360,441,561.
Written comments are due by December 22 and can be submitted at regulations.gov, docket FNS-2025-0137; no compliance date takes effect until a final rule is published.
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