Data & Analytics

Aspen Institute warns states need funding to strengthen EBT security

A proposed USDA rule would require states to upgrade SNAP payment cards and implement other security measures, but the Aspen Institute says new federal mandates risk competing with costly program changes.

By Sophia Fox-Sowell

October 29, 2026

NEW YORK, NY - OCTOBER 30: A store displays a sign accepting Electronic Benefits Transfer (EBT) cards for Supplemental Nutrition Assistance Program (SNAP) purchases for groceries on October 30, 2025 in New York City. Approximately 42 million Americans rely on food stamps that are deposited monthly onto their EBT cards. On November 1st, that assistance is set to end amid the ongoing U.S. government shutdown, potentially leaving households desperate to find ways to put food on the table. (Photo by Spencer Platt/Getty Images)

States need dedicated federal funding to strengthen Electronic Benefit Transfer card security as they prepare for new federal requirements to administer food assistance programs, according to a report from the Aspen Institute.

The report, published this week, responds to a proposed U.S. Department of Agriculture rule that would require states to transition to chip-and-tap EBT cards and adopt additional security measures to protect Supplemental Nutrition Assistance Program benefits from theft. It recommends that Congress provide resources for EBT security upgrades and ongoing maintenance rather than leave states to absorb the costs.

“We generally believe that however you pay for your groceries, you should be afforded the same security,” Kira Tebbe, senior manager of the Aspen Institute’s Benefits Transformation Initiative and one of the authors of the report, said in an interview. “And right now, EBT cards have a lot worse security.”

The USDA’s proposed rule, issued last week, would require states to upgrade SNAP EBT cards to support chip and near-field communication technology, while requiring retailers to accept those transactions. It would also establish updated security standards, mandate verification for balance inquiries and give recipients better access to transaction histories and account-security options to detect fraud.

Only eight states have adopted chip-and-tap EBT cards, leaving many SNAP recipients relying on magnetic stripe cards vulnerable to skimming and cloning. The USDA estimates that the proposed rule would cost $283 million in one-time implementation expenses across states, the federal government, households and businesses.

Tebbe said states recognize the need for stronger security protections but face significant initial and ongoing costs, including more expensive cards, payment processor upgrades and replacement cards.

“The awareness and the attention from states is there, but the funding is not,” Tebbe said.

The proposed mandate also comes as states are struggling to balance competing demands created by the One Big Beautiful Bill Act, H.R. 1, which increased states’ share of SNAP administrative costs from 50% to 75% starting Oct. 1. States with payment error rates above certain thresholds are also scheduled to begin covering a portion of benefit costs in fiscal 2028.

“Both the reduction of administrative costs, which is how states paid for or generally pay for staff and technology, but also the looming benefit cost share, both of which give states a lot less funding for the SNAP program,” Tebbe explained. “So the concern with unfunded mandates is that [it] would be another thing that states would have to do with already less funding.”

A July survey by the American Public Human Services Association found that 58% of states had shifted resources away from other priorities to meet H.R.1’s requirements, while 13% reported delaying chip-card implementation or related investments, according to the Aspen Institute.

“States are actively pursuing a wide range of strategies to improve SNAP payment accuracy and prepare for the implementation of H.R. 1,” APSHA’s findings read. “States reported investments in workforce development, technology modernization, data analytics, policy changes, and participant communications, often pursuing multiple approaches simultaneously.”

Tebbe said chip cards are only one layer of protection.

In August, the Aspen Institute announced a pilot program with JPMorganChase and support from the AARP Foundation to help states implement real-time transaction blocking, which flags suspicious purchases — similar to debit and credit card protections — and temporarily prevents fraudulent transactions. The pilot aims to help agencies evaluate fraud prevention while minimizing disruptions for eligible recipients.

Tebbe said real-time transaction blocking generally requires fewer resources to implement than chip cards and also does not require retailers to upgrade their point-of-sale systems. The institute is working with five states to test the technology, she added, with additional launches expected next year.

“We need to ensure that states have the resources to have that multi-layered approach to prevent fraud — both as it currently is done, but also as it may continue to evolve to be,” Tebbe said.

The USDA’s proposal includes a 60-day comment period through Dec. 22. Tebbe said federal attention is welcome, but broader congressional action is needed to help states implement protections nationwide. Without dedicated funding, she said states risk being required to strengthen security while simultaneously managing other costly SNAP changes.

“In order to bring these security measures nationwide — chip, verification checks, real-time transaction blocking, you really need broad federal action to put resources towards those priorities to bring them to life,” Tebbe said. “Because at the end of the day, it’s important that food assistance dollars go to those who need it.