USDA Proposes Requiring Chip Cards for SNAP in All States to Stop Benefit Theft

The Trump administration is proposing to require every state to upgrade the cards that carry food stamp benefits, a move aimed at a form of theft that has drained millions of dollars from recipients. The U.S. Department of Agriculture released the proposed rule last week. It would require chip-enabled Electronic Benefits Transfer, or EBT, cards in all states, and it would require retailers that accept SNAP benefits to have payment terminals that support tap-to-pay.

The target is card skimming. Thieves pull personal information from payment terminals and then drain accounts. Most Supplemental Nutrition Assistance Program cards still rely on a magnetic stripe, which does a poor job of protecting the data stored on it. Many U.S. banks moved to microchips and tap-to-pay more than a decade ago. The USDA says fewer than a third of states have switched or are in the process of switching their EBT cards.

The losses are large. In January, the USDA Office of Inspector General projected that SNAP theft could reach $233 million between 2025 and 2026, largely because of skimming. A recent ProPublica investigation, using data from the benefits-tracking app Propel, found that $470 million was stolen electronically from SNAP recipients last year. In most states, stolen benefits are not replaced. Propel says that leaves recipients making hard choices, such as skipping meals or borrowing money to buy groceries.

"These proposed changes will protect SNAP benefits from thieves and ensure benefits are accessible by approved households," the USDA's Food and Nutrition Administration said in its summary of the rule. The department estimates the changes would cut stolen benefits by at least $1.5 billion over the next decade and says the rule has been in development for nearly four years.

Money has been the main barrier. According to the Government Accountability Office, chip-enabled cards cost about 10 times as much to produce as magnetic-stripe cards. Earlier this month, NPR reported that modernizing the cards has wide support among state officials, federal watchdogs, and Republicans and Democrats in Congress. The question has been who pays. State SNAP agencies are also facing new budget pressure from President Trump's One Big Beautiful Bill Act, which the USDA acknowledged in the proposal. It said it wants to hear from state agencies about the cost burden.

Asked whether the department would help fund the upgrades, the USDA did not offer money. "For years, States had access to administrative funds to stop this egregious abuse of taxpayer resources. Yet few acted," it said. In the proposed rule itself, the department called the administrative costs "a necessary investment to deter the loss of Federally-funded SNAP benefits."

The public has 60 days to comment before the USDA publishes a final rule. The department is weighing a two-year deadline for states, counted from the date the final rule is published, and has asked for input on whether that is enough time.

SNAP has been a focus of the administration's broader campaign against fraud. Last week, the Justice Department announced that its fraud division had helped uncover nearly $42 million in schemes targeting food benefits, with cases ranging from identity theft to retailers illegally swapping cash for benefits. Those cases involve a different kind of fraud from skimming, which victimizes the recipients themselves rather than taxpayers directly, and which the new card standard is designed to address.