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12:34 PM
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Forcing Small Business to Be Good Corporate Citizens

The City Council of Los Angeles recently voted 15-0 to explore the feasibility of compelling farmers markets in the city to accept food stamp EBT cards as a form of payment.

This would require all farmers markets to purchase a debit/credit card terminal in order to read the EBT cards as well as adopting a cumbersome paper process in order to be paid for their EBT transactions.

Council will enforce its will in this matter by refusing to certify any markets that fail to accept food stamp EBT cards.

Supporters of the measure believe that the markets should be able to get the electronic terminals at no cost from the state. Venders at each marker would all share one terminal.

The purpose behind Council’s action is to increase access to fresh fruits and vegetables in the city’s urban neighborhoods that lack easy access to major supermarkets.

Instead of burdening small businesses already in these neighborhoods, it might be more productive in the long run to correct the conditions that are preventing supermarkets from locating in these areas.
6:58 AM

Issue Facing the Ebt Industry in 2016

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Issue Facing the EBT Industry in 2016
 In November it was my pleasure to moderate a discussion at the EBT-The Next Generation conference about the biggest issues facing the EBT industry.

I worked with a panel of federal officials and processing companies including Xerox State Government Services and Fidelity Information Services to examine potential issues.

In the end we settled on 3 issues as the most pressing.

They were: Meeting the 2020 Congressional mandate for converting all state, territorial and tribal WIC benefit programs to EBT, Improving the RFP process by which state EBT programs select their processors, and how to deal with the effects of a government shutdown on EBT nutrition programs should one occur in 2016.

The 2020 WIC EBT Mandate
Meeting the 2020 WIC EBT Congressional mandate involves doing a mass conversion of state WIC programs from their current paper voucher payments in a short period of time, with a limited number of companies qualified to design, build and operate EBT systems. While the state conversions have already begun, the velocity of the switch from paper to plastic have to accelerate in order to meet Congress’s mandate of nationwide WIC EBT by 2020.

The EBT industry is anticipating a traffic jam as multiple states simultaneous release RFPs for qualified processors. Federal officials advise state EBT managers when conducting a procurement for a WIC EBT processor to do the following:
•    Signal the marketplace in advance with a notice of pending procurement.
•    Keep the RFP open as long as allowed by state law.
•    Grant bidders requests for extensions to the bidding periods, if possible.
•    Be flexible on the exact date when you want conversion to EBT to occur.

The RFP Process

Each state is responsible for acquiring through a competitive bidding process its own EBT systems for the distribution of nutrition benefits. The federal government manages the overall nutrition programs, and sets the technical requirements for EBT systems to assure uniformity and smooth operation. The feds also pay 100% of the cost of the benefits and 50% of the states’ administrative costs for benefit distribution, including EBT. 

It is also worth noting that because EBT Systems are procured directly by the states there is no overall authority controlling the release of RFPs. This can result in too many RFPs out for bid at any one time. The results of this condition can include less accurate RFP responses, upward price pressure, and lack of bidder interest in smaller projects that hit the market at the same time as larger states. Smaller projects have fewer transactions over which to spread the considerable fixed costs of EBT contracts, and are less desirable to processors than larger projects.

The RFP process gives states the chance to update their EBT platforms by adding things like mobile apps or data warehousing. The RFP process also gives the states the chance to lower cost by eliminating expensive requirements, which are no longer needed. Such requirements may include staffing, custom reporting, or unnecessarily high mandated service levels that exceed the requirements of the commercial electronic-payments industry.

Possibility of a Government Shutdown

The third area of concern was how to deal with the effects of a government shutdown on nutrition programs, if a shutdown were to occur. 

EBT processors expressed the opinion that in the event of a shutdown it would be critical for representatives of the Food and Nutrition Service to share any information they have on the shutdown with the transaction processors.  FNS is the branch of the Agriculture Department, which administers the Food Stamp Program and WIC on the Federal level. 
Another suggestion was to create a task force to define lines of responsibility in the event of a shutdown.