What Is the Electronic Benefits Transfer System?

The Electronic Benefits Transfer System is used in the United States to transfer benefits to individuals that qualify for them. This program is the replacement for the program that was commonly referred to as "food stamps." Instead of using food stamps, the users of the program use the Electronic Benefits Transfer System to gain access to the help that they need.

How It Works

Using this system is similar to using a debit card or a gift card. Individuals that qualify for food stamps are issued an Electronic Benefits Transfer (EBT) card. This card looks just like a regular debit or credit card. The individual can then shop at any merchant that accepts this form of payment. The individual will collect the items that he needs and check out at the register as usual. He will swipe the card through the payment processor as if it were a traditional debit card. The individual will also enter into the terminal a PIN that has been assigned to him by the state. Then the appropriate amount of money will be deducted from his food stamp account and credited to the merchant. 

Cash Benefits

The system can also be used to provide cash benefits. Individuals that qualify for State General Assistance or Temporary Aid for Needy Families can gain access to cash benefits through this program. In that case, their EBT cards will be credited with cash. They can then use the cards as if they were traditional debit cards. They can purchase anything that they want with the cards and can even get cash back from merchants.

Food Stamp Regulations

If you are using an Electronic Benefits Transfer card to access the food stamps program, you have to abide by certain rules that are set forth by the program. One of the most important rules is that the card can be used to purchase only specific food items. You cannot go into the grocery store and purchase anything that you want. There is a preapproved list of items that is generated by the state that is running the program. Each state will be in charge of developing and administering its own EBT program. 

Taxes and Fees

When using this type of card, an individual cannot be charged taxes by the merchant. Since the state government is essentially the one paying for these goods, there will not be a tax on the purchase. It is also illegal for merchants to charge any fees or surcharges when running the cards through their payment processors. This allows individuals to effectively purchase more with the same amount of money.


Most of these programs utilize a rotation system when it comes to allowing the benefits to be used. Every person on the program will not receive access to monthly benefits on the same day. Some people will be receiving benefits through the system every day of the month on a rotational system. This system will depend on the number of their case file. 

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