Electronic Benefits Transfer (EBT) is
the delivery of government benefit funds, such as food
stamps and cash benefits (TANF - Temporary Assistance
to Needy Families) to recipients utilizing a magnetic
stripe card that works like a debit card, point-of-sale
terminals, the host mainframes and telecommunications
technology. The end result is the elimination of paper
coupon benefits distribution. The electronic process results
in increased security, thereby reducing fraud and benefit
misuse.
Each year, federal and stated programs deliver almost
$500 billion in cash benefits and food assistance. Every
state, at this point in time, has an EBT program established
or pilot project underway to replace paper delivery methods.
The US government has mandated that all federal financial
support services and entitlements be distributed through
direct electronic deposit by the year 2002. Initially,
the effort to implement federal related EBT will be on
a small scale which will include the Food Stamp Program
and Aid to Families with Dependent Children. This is in
addition to, and parallel with, individual state programs
who have similar benefit programs. The Federal Government's
strategy is to piggy-back upon the state programs rather
than creating a separate delivery method. Since all states
will be providing these benefits via electronic access,
the Government will be able to use the existing state
card to distribute its funds as well.
For recipients with bank accounts, direct deposit of
benefits will be the most cost effective means of delivery.
For those individuals who do not have bank accounts, and
account will be provided to the recipients through special
banking arrangements made by the State and Federal agencies.
