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Frequently Asked Questions
What is Electronic Benefits Transfer?
Electronic Benefits Transfer (EBT) is an electronic system, based on computers and telecommunications, which is used to distribute benefits to individuals' accounts or directly to authorized clients. EBT is currently used in over 30 states to issue food stamp and cash benefits. About 20 percent of all food stamp benefits are currently issued via EBT.How does EBT work?
Under the EBT system, benefit recipients apply for their benefits in the usual way, typically by filling out forms at their local agency office. Once eligibility and the authorized level of benefits have been determined, an account is established in the participant's name, and benefits are deposited electronically in the account each month. Most EBT systems issue a plastic magnetic stripe card, similar to a credit card, to the clients, who can then access their benefits at participating retail stores by using a personal identification number (PIN).What other types of EBT are there?
There are several other EBT applications, including smart cards, hybrid cards and direct deposit. Smart cards are plastic, credit-card-sized cards with computer chips embedded in them. Hybrid cards have both computer chips and magnetic stripes.What are the major benefits that EBT offers consumers?
Electronic Benefit Transfer benefits clients, the commercial sector and taxpayers by providing a more effective and efficient way to deliver benefits. Some of these benefits include the ability to manage or control expenditures more effectively; fraud reduction; reduced paperwork and elimination of the need to complete redundant, time-consuming forms; and the potential of using one card with the capability to process multiple services.How is a smart card different from the magnetic stripe card that I carry in my wallet?
Smart cards allow storage of thousands of times the information storable on magnetic stripe cards. In addition, smart cards are reliable, perform multiple functions, and they can be more secure because of built-in security mechanisms such as advanced digital encryption and stored biometrics.What is a multiple application card?
A hybrid card or a smart card has the capability of carrying multiple applications. A multiple application card can support several different types of applications (e.g., health care, financial services, travel, and loyalty programs), thus reducing the number of cards one might otherwise need to carry in a wallet or purse.How secure and confidential are smart cards?
Smart cards actually offer more security and confidentiality than other financial information or transaction storage vehicles. A smart card is a safe place to store valuable information such as private encryption keys, account numbers, passwords, or valuable personal information. It's also a secure way to perform processes that one would not want intercepted, such as the transfer of money from a personal bank account to a seller.What is the potential for the smart card business?
Today, there are fewer than one billion smart cards in use. Smart card activities are growing at 30 percent a year, predominately outside the U.S. Globally, the more common uses include pay phones, wireless telephony, Internet access, banking, health care and pay TV. Over the next five years, the industry will experience steady growth, particularly in cards and devices used to conduct electronic commerce and to enable secure access to computer networks. However, in the United States, the nearly universal infrastructure already in place for magnetic stripe cards has limited the growth of smart cards in this country.
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