USDA proposes chip and tap-to-pay cards for SNAP benefits nationwide

The Food and Nutrition Administration (FNA) of the U.S. Department of Agriculture (USDA) proposed on Friday, 23 October 2026 to require every state to deliver Supplemental Nutrition Assistance Program (SNAP) benefits on cards with an embedded electronic chip and contactless capability, retiring the magnetic stripe that thieves have learned to clone. The proposed rule was published in the Federal Register (Vol. 91, No. 204, Proposed Rules, p. 66958) under docket FNS–2025–0137 and RIN 0584–AE99, and written comments are due by 22 December 2026.

SNAP is the largest domestic nutrition assistance program in the United States: in fiscal year 2025 around 42 million low-income individuals received benefits in an average month. All states have used Electronic Benefit Transfer (EBT) cards exclusively since 2004, and most completed the move away from paper coupons in the 1990s, when magnetic stripes were the dominant payment technology. FNA now says that reliance has left SNAP as one of the last payment methods conducted almost exclusively by stripe, and that a significant portion of benefit theft comes from skimming card data at point-of-sale terminals.

The agency quantified the damage: as of the second quarter of federal fiscal year 2025, 753,929 claims for replacement of stolen SNAP benefits had been approved nationwide, with a total replacement value of $360,441,561. As of August 2026, seven states had already issued chip cards to participants, with others in progress.

Two years to replace every card

The rule proposes a two-year timeframe after publication of a final rule for states to issue benefits via chip and NFC technology, a window FNA says allows testing with state agencies, third-party processors, EBT vendors and retailers before the switch. States would have to issue NFC-enabled chip cards under 7 CFR 274.1(a), piloting first in limited geographic areas and notifying households and retailers in advance.

Key card requirements in the proposal:

• The chip transaction must be the primary method, by insertion or by tap; the magnetic stripe survives only as a fallback, and a stripe transaction may not be permitted until at least one chip attempt has failed.
• Cards must be issued in an inactive state, requiring household activation, and must carry an expiration date tied to the physical card rather than to benefit expungement or certification periods.
• The primary account number must be printed on the back of the card, and each card must carry a three-digit card security code (CSC) that is never stored electronically on the card.
• States may not charge a fee for a card replaced because of expiration or a change in benefit delivery method, and such replacements would not count toward the excessive-replacement threshold.

Retailers, terminals and online shopping

Because chip cards carry a new application identifier, A0000000044542, every point-of-sale terminal must be reprogrammed to accept it; a new service code (220) tells the terminal the card has a chip, while stripe-only cards keep code 120. Where a terminal has not been updated, the device must fall back to the stripe through the Empty Candidate List process, and FNA tells retailers to train checkout staff on it.

Internet retailers face parallel duties: PIN-less refunds must run through a secure third-party processor — currently only Fiserv, WorldPay and Forage are approved — and platforms must drop guest checkout, limit balance inquiries (FNA recommends a maximum of two per hour) and transmit the card’s CSC and expiration date.

Anti-fraud controls and operating standards

The proposal creates 7 CFR 274.7(k), requiring every state agency to offer a minimum list of card security services, and bars easily guessed PINs, including entirely sequential or reverse-sequential digits, one digit repeated, alternating digits, the last digits of the card number and PINs beginning with 19. It also ends manual voucher redemption as an ongoing business method, except in limited cases such as an EBT system outage or disaster.

For the first time, the rule would codify national SNAP EBT Operating Standards as Appendix A to Part 274, ratified by the American National Standards Institute (ANSI) in August 2024 through work at the Accredited Standards Committee X9, so the agency can update technical requirements without a new rulemaking.

Cost and burden

FNA estimates one-time reporting burdens of 19,504 hours across 53 state SNAP agencies, plus 2,249,365 hours for roughly 22.5 million households to activate chip cards and 1,799,492 hours to review state notices. About 629,822 households experiencing homelessness may need to travel to a local office for a new card. Three EBT host processors would remain in the market to absorb the system changes.

The rule matters beyond paperwork: it would make the federal government the arbiter of how 42 million Americans’ food money is protected at the till, forcing simultaneous upgrades by states, processors and hundreds of thousands of retailers, and it explicitly asks the public whether two years is enough — and whether the magnetic stripe should disappear altogether. The document was signed by Stephen A. Vaden, Deputy Secretary of Agriculture, with Erica Kain of the FNA’s Issuance Support Branch listed as the contact.

Source: Federal Register, Vol. 91, No. 204, 23 October 2026, Proposed Rules, p. 66958 (official reference: FNS–2025–0137; FR Doc. 2026–21658).