Amazon One Of 7 Picked For Online Food Stamp Pilot

The U.S. food stamp program seems set for a digital upgrade. The Department of Agriculture is launching a pilot program that would enable Americans that participate in the Supplemental Nutrition Assistance Program (SNAP) — AKA food stamps — to use them to buy groceries online. To this point, using food stamps online was not possible.

The impetus behind the program is the way the law is written, access to food options and how grocery purchases increasingly are bought in the current commerce landscape.

The big news though is the seven retailers in seven states — with users in both rural and urban areas — chosen for this two-year pilot, which is slated to begin this summer:

  • Amazon
  • FreshDirect
  • Safeway
  • ShopRite
  • Hy-Vee
  • Hart’s Local Grocers
  • Dash’s Market

All seven volunteered to be part of this program.

Nationwide, the current SNAP program is an aid to more than 43 million low-income Americans, with the average monthly benefit being $125.27 per month for an individual and just under $255 for a household. About half of the beneficiaries are children, and 10 percent are over the age of 60 years old.

The program will not only help those that are less mobile but could also help areas where there are food deserts. Those food deserts are generally defined as places with low accessibility to healthy food, as well as a certain distance to the nearest supermarket.

USDA officials said the pilot will be testing both online ordering and payment, with specific attention to any technical and security challenges in advance of launching nationwide. As for what SNAP participants can purchase, the benefits can only be used to buy certain eligible items online but would not take care of the service or delivery charges that typically come with buying online.

Agency officials also added that the new digitally focused concept stems from the 1964 Food Stamp Act, which emphasized that the program be “operated through normal channels of trade.” And, over time, those channels clearly have evolved since 1964.

“Online shopping has become more of a normal channel of trade,” Jessica Shahin, associate administrator for SNAP, said.

Noticeably absent from this list is Walmart, the nation’s largest grocer and for whom 4 percent of its grocery sales are from customers using food stamps. One of Walmart’s competitive advantages in the grocery area is its acceptance of food stamps, which, until this pilot at least, were impossible to use online.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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