This Is the Real SNAP Fraud
The credit card companies countered by developing more secure chip and “tap-to-pay” features, and by loading credit cards onto cell phones. Adoption of the new technology was initially slow, but demand skyrocketed during the Covid pandemic as customers sought contactless forms of payment, especially at grocery stores, the most difficult type of retail establishment to avoid. The other thing that happened during Covid was that Congress expanded SNAP eligibility and increased the average monthly benefit from about $120 per person to about $230. Ever-adaptive, criminal gangs shifted their target from newly secure credit cards to newly flush SNAP EBTs, which still relied on insecure magnetic stripes.
The obvious solution is to upgrade all EBTs with chips and tap-to-pay. But only one state, California, has done that so far, because it’s expensive; California’s upgrade cost about $75 million. And because those corner grocery stores and bodegas will once again be slow to upgrade their POS devices, California’s new card has a magnetic stripe, too, which still leaves it somewhat vulnerable to fraud. Senators Ron Wyden, a Democrat from Oregon, and Bill Cassidy, a Republican from Louisiana, introduced a bill in 2024 requiring states to make the changeover, but it didn’t have enough stand-alone support, and a hoped-for farm bill to which it might have been amended failed to materialize. Today, with partisan divisions leaving congressional appropriators limping from one short-term CR to another, no farm bill seems likely anytime soon.
In November 2024, then-Agriculture Secretary Thomas Vilsack sent a letter to governors in 50 states announcing that the nonprofit American National Standards Institute had developed technical specifications showing how states could transition to the more secure chip and tap-to-pay technology. That same year, the Agriculture Department directed grocers to an online guide to help them make the changeover and said a proposed regulation would be forthcoming to “establish timeframes for upgrading to secure payment technologies.”
