By Henry Ashcroft
WASHINGTON — The Agriculture Department wants every state to stop issuing magnetic-stripe food assistance cards, the technology that has let skimming crews drain hundreds of millions of dollars from poor households. The question now before states, retailers and Congress is who pays to replace them.
A proposed rule published in the Federal Register on Oct. 23 would require state agencies to issue Supplemental Nutrition Assistance Program cards that carry an EMV chip and support contactless “tap” payments. It would also require retailers that accept SNAP to have checkout terminals that can read them. The public has until Dec. 22 to comment under docket FNS-2025-0137.
“These proposed changes will protect SNAP benefits from thieves and ensure benefits are accessible by approved households,” USDA’s Food and Nutrition Administration wrote in its summary of the rule.
The proposal comes as states absorb a 50 percent cut in their share of SNAP administrative funding under the One Big Beautiful Bill Act, which took effect Oct. 1. The rule doesn’t include new federal money to buy the cards. In New York, which is already ordering chip cards for roughly 2 million households, the change would turn the state’s own fix into a national baseline.
What the rule would do
Congress ordered the rulemaking nearly four years ago. Section 501 of Title IV, Division HH, of the Consolidated Appropriations Act, 2023 (Public Law 117-328) directed the agriculture secretary to write regulations requiring state SNAP agencies “to take security measures in detecting and preventing the theft of benefits, including through card skimming, card cloning, and other similar fraudulent methods,” as the proposed rule puts it.
The rule notes that federal regulations already allow chip cards, smart cards and digital wallets. Even so, it says, “all agencies operating SNAP have continued to issue benefits via the same payment method used since the transition from paper coupons: EBT cards with magnetic stripes, secured using Personal Identification Numbers.”
Magnetic stripes are easy to copy. Thieves attach skimmers to store card readers, capture card data and PINs, and use cloned cards to empty accounts, often within hours of the monthly deposit. Chips generate a one-time code for each transaction, which makes a copied card far less useful.
According to NPR, the department is considering giving states two years from publication of a final rule to comply, and it asked for comment on whether that is long enough. Fewer than a third of states have switched or are in the process of switching, USDA told the network.
The department estimates the changes would cut stolen benefits by at least $1.5 billion over the next decade, NPR reported.
The cost question
The rule’s regulatory impact summary puts one-time implementation costs for states, the federal government, households and businesses at “roughly $283 million combined in FY 2028-2029.” Ongoing costs would start at $12 million in fiscal 2030, with recurring costs of roughly $152 million over fiscal 2028 to 2037.
USDA argues the spending is justified.
“As stewards of taxpayer dollars, the Department considers these administrative costs as a necessary investment to deter the loss of Federally-funded SNAP benefits,” the proposed rule said.
When NPR asked whether the department would help states pay for the upgrade, USDA pointed to the states’ record. “For years, States had access to administrative funds to stop this egregious abuse of taxpayer resources. Yet few acted,” the department said.
USDA made a similar point in an Oct. 14 statement to NPR, before the rule came out. “Skimming has been plaguing recipients for years, and States sat idly, allowing benefits to be stolen from those who need them. SNAP administrative funding changes should not make it harder to fight skimming, as it simply holds these complaining lawmakers accountable,” the department said.
A USDA spokesperson defended the proposal. “After nearly four years of debate, the Department publicized its proposed rulemaking to modernize the nation’s EBT system for SNAP, including the requirement of chip-enabled cards that significantly decrease instances of benefit skimming, cloning, and other theft,” the spokesperson said in an email to The Buffalo Chronicle. “These changes will significantly reduce stolen benefits, at least by $1.5 billion over the next decade, as well as align with industry standards and execute stronger protections for the recipient, the retailer, and the American taxpayer.”
The spokesperson again put the burden on the states. “For years, States had access to administrative funds to stop this egregious abuse of taxpayer resources. Yet few acted. It is time for States to better protect food stamp recipients and the American taxpayer funding this nearly $100 billion-per-year program,” the spokesperson said.
Federal watchdogs and anti-hunger advocates say the new budget math will make that harder. Kathryn Larin, a director at the Government Accountability Office who has examined SNAP fraud prevention for years, told NPR the administrative funding cut will squeeze state budgets.
“It will increase the budgetary pressure and will make it more difficult for states to allocate funds to benefit card theft prevention,” Ms. Larin said.
Gina Plata-Nino, SNAP director for the Food Research & Action Center, made the same point to NPR. “The likelihood of states being able to switch to chip-tap technology without federal support is going to be even more less likely,” she said.
The GAO has estimated that chip-enabled cards cost about 10 times as much to produce as magnetic-stripe cards, according to NPR.
Why the losses keep growing
The scale of the theft is hard to pin down, partly because the federal government stopped requiring states to report it.
The 2023 spending law let states replace stolen benefits with federal money. That authority “expired on December 20, 2024, so States are once again no longer required to report EBT fraud statistics to the Department,” the proposed rule says. By the second quarter of fiscal 2025, it says, “753,929 claims for replacement of stolen SNAP benefits have been approved across the nation, with a total replacement value of $360,441,561.”
The rule cautions that those figures cover only households that filed claims and “may not capture the full scope of benefit theft.”
Private data suggest the losses are larger. ProPublica, in an investigation republished by Government Executive, reported that $470 million was stolen electronically from SNAP recipients in 2025. The figure is based on data from Propel, a company whose app lets recipients check their balances. ProPublica also reported that more than 990,000 households that received food assistance last year had benefits stolen.
USDA’s Office of Inspector General has projected that SNAP theft could reach $233 million between 2025 and 2026, largely from skimming, NPR reported.
The Secret Service, which investigates many financial crimes, says the thieves are organized and international.
“These transnational organized crime groups are coming into the U.S. specifically to target our benefits system,” Michael Peck, an assistant special agent in charge of the Secret Service’s Criminal Investigative Division, told NPR. “They know they’re stealing from the poor.”
Mr. Peck told ProPublica that the agency has been delivering the same message to Congress. “We’ve started many, many briefings saying that one of the biggest ways we’re going to fight this is to just get chips in the cards,” he said.
He told NPR that police raids alone can’t solve the problem. “The issue we run into is the fact that the groups that conduct this fraud aren’t afraid to go right back to a store and install again,” Mr. Peck said.
How Washington got here
Chip cards have broad support in both parties, but paying for them has repeatedly stalled.
ProPublica reported that a bipartisan December 2024 spending agreement, which included a provision extending federal reimbursement of stolen benefits through 2028, collapsed before passage. Since then, the outlet reported, the administration has dropped EBT-theft funding from USDA budget requests and cut at least 650 staff at the Food and Nutrition Administration. ProPublica also cited a USDA inspector general finding that the agency’s delay in issuing card-security guidance had allowed the theft of at least $555 million in benefits.
House Agriculture Committee Chairman Glenn Thompson, a Pennsylvania Republican, called chip technology “very effective” at a March hearing, ProPublica reported, but blocked a bipartisan proposal to fund it, citing budget constraints. A committee aide told the outlet that the chairman “is supportive of finding a fiscally responsible path forward for implementing policy that supports chip cards,” and that Democrats weren’t willing to “find the budgetary offsets.”
Hill staffers told ProPublica that a national chip upgrade would cost about $215 million, compared with more than $600 million a year in theft from SNAP and other benefits. The Congressional Budget Office hasn’t formally scored the proposal.
Sen. Ron Wyden, an Oregon Democrat who has pushed for more secure cards since the Biden administration, tied the issue to the broader fight over food aid. “The conversation about boosting cybersecurity standards is hard to make as long as Republicans refuse to restore the food assistance,” Mr. Wyden told NPR. “What I’m committed to doing is getting both of these over the finish line.”
A few states moved on their own. California has nearly finished its transition, and Alabama and Oklahoma began issuing new cards this year, according to ProPublica.
New York’s head start
New York is among the states that decided not to wait.
Gov. Kathy Hochul announced in July that the state will begin issuing about 2 million chip-equipped EBT cards in the first quarter of 2027, supplied by Fidelity Information Services, the Times Union reported. The state and lawmakers put funding for the cards in the 2027 budget.
“We are committed to protecting New Yorkers from benefit theft and modernizing our EBT system is the most effective tool we have to prevent heartless criminals from preying on some of our most vulnerable residents,” Ms. Hochul said in a statement. “As the federal administration continues to undermine efforts to address food insecurity and hunger, New York remains focused on uplifting families and ensuring they have the help they need to put food on the table.”
Citing USDA data, the Times Union reported that about $87.6 million in SNAP benefits was stolen in New York from August 2023 to March 2025. Anthony Farmer, public information director at the state Office of Temporary and Disability Assistance, told the paper that New York used federal funds to replace benefits in more than 113,000 claims totaling $51.8 million through Dec. 21, 2024, after which federal reimbursement stopped.
“The new cards will begin being issued to recipients in the first quarter of 2027,” Mr. Farmer said in an email to The Buffalo Chronicle. “Chip cards are a more secure payment option and are harder to copy and steal SNAP account information from.”
Mr. Farmer said the agency has contracted with a vendor to provide the new cards and moved before the money was in hand. “The Governor directed OTDA earlier this year to implement this priority as quickly as possible. OTDA proactively issued a request for proposals for a new EBT card vendor capable of providing cards with chips that are more secure than the existing cards – to be prepared to transition once funding was secured,” he said. He noted that the federal EBT system “only recently gained the ability to accept chip cards.”
He also pointed to steps the state has taken in the meantime. “In addition to securing funding to transition to secure chip-based EBT card technology, the Governor has taken significant steps to crack down on benefit skimming, including implementing protections such as the EBT freeze/unfreeze card feature, which enables New Yorkers to freeze their cards when not in use and signing legislation to warn EBT cardholders about potential electronic theft,” Mr. Farmer said.
The agency’s response did not say how many households statewide or in Erie County will receive chip cards, did not give figures for what the state has spent or budgeted on the switch, and did not address whether the federal rule would add costs for New York.
The state is now pressing stores to be ready. At an Oct. 22 event in Queens, state Sen. John Liu and Assemblymember Nily Rozic urged retailers to upgrade their terminals by the state’s Dec. 1 deadline, QNS reported. The outlet said the state received 34,000 claims for stolen benefits totaling $17.1 million over the previous 12 months, most of which can’t be recovered.
“This upgrade is long overdue, and now that the state has done its part, we urge supermarkets and other EBT-accepting businesses to upgrade their systems as soon as possible so their customers can have the peace of mind to shop at their stores and put food on the table,” Mr. Liu said in a statement.
“I urge retailers to meet the December 1 deadline and do their part to protect consumers and ensure these critical benefits reach the families they are intended to serve,” Ms. Rozic said.
U.S. Rep. Grace Meng, a Queens Democrat, has introduced the Ending Stolen SNAP Benefits Act. “My bill, the Ending Stolen SNAP Benefits Act, seeks to help New York and other states cover the costs of switching to these improved cards, and as we prepare for this upcoming transition, we remind local retailers that they should be ready to accept them,” Ms. Meng said in a statement.
What it means in Western New York
Erie County residents have been hit, too. In an earlier release, the Erie County Department of Social Services said it was handling “more than 700 applications submitted by county residents alerting the Department that their benefits were stolen due to Electronic Benefit Transfer (‘EBT’) skimming.” The department said the nationwide skimming operation had affected clients across Western New York.
Because federal replacement authority has lapsed, stolen benefits generally can’t be restored. County guidance tells cardholders to change their PINs often, check their accounts regularly, and report a stolen card right away by calling 888-328-6399 or through connectEBT.com or the connectEBT app. The county’s Social Services information line is 716-858-8000.
The state Office of Temporary and Disability Assistance also points cardholders to the EBT freeze/unfreeze feature, which lets them freeze their cards when they aren’t using them, and to its EBT scam resources at otda.ny.gov/ebtscam.
The federal rule would also affect the corner stores, groceries and farmers’ market vendors across the region that accept SNAP. They would need terminals that can read chip and tap cards. New York’s Dec. 1 retailer deadline means many will have to upgrade before the federal requirement is even final.
What comes next
Comments on the proposal are due Dec. 22 through Regulations.gov under docket FNS-2025-0137, RIN 0584-AE99. USDA has asked states in particular to describe the cost burden. After reviewing comments, the department would publish a final rule, which would start the compliance clock.
Several questions are still open: whether Congress will pay for the upgrade, as Ms. Meng’s bill and earlier bipartisan proposals would, and whether the department’s two-year window will hold. For the 42 million people USDA says participated in SNAP in fiscal 2025, the answers will shape how long the magnetic stripe stays in their wallets.
The White House press office referred questions about the rule to USDA. USDA’s statement did not directly address The Buffalo Chronicle’s questions about federal help for states or the length of the compliance window.
Updated October 27, 2026: This story was updated to include a response from the White House press office.
Updated October 27, 2026: This story was updated to include a statement from USDA.
Updated October 27, 2026: This story was updated to include comment from the state Office of Temporary and Disability Assistance.
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