California initiates test for new chip and tap EBT cards amid fraud concerns

In a recent meeting of the Oregon State Legislature's Joint Committee on Ways and Means Subcommittee on Human Services, discussions centered on the pressing issue of counterfeit card fraud and benefit theft affecting the Supplemental Nutrition Assistance Program (SNAP). As a response, multiple states, including Oregon, are considering the implementation of new chip and tap EBT cards, which will still retain traditional magnetic stripes. California is set to be the first state to test this technology, with a rollout expected this spring.

Oregon retailers are already preparing for this transition by updating their point of sale systems to accommodate the new EBT technology. However, this complex project is taking longer than anticipated, and the costs associated with the transition are expected to significantly increase the current budget. The Oregon Department of Human Services (ODHS) is currently gathering information from the state's EBT card vendor, as the new technology will require substantial initial setup costs and ongoing expenses for each card issued.

The shift to chip and tap technology is not merely a response to customer fraud; it is a proactive measure against organized criminal activities that have been targeting SNAP and Temporary Assistance for Needy Families (TANF) benefits. These criminal operations employ sophisticated techniques that are difficult to counteract, making the need for enhanced security measures urgent.

During the meeting, committee members expressed concerns about the financial burden this transition may place on small to medium-sized businesses in Oregon, as there is currently no federal budget allocated to assist merchants in upgrading their systems. The timeline and final costs for the project remain uncertain, but ODHS is also considering a complete rebranding of the Oregon EBT card if the new technology is adopted.

As the state navigates these changes, the committee emphasized the importance of ensuring that the new EBT cards provide heightened security for users. While the potential benefits of the chip and tap system are still being evaluated, the hope is that federal funding will help offset some of the implementation costs.

The discussions highlighted the broader implications of these changes for the community, particularly for those relying on SNAP benefits. As Oregon moves forward with these plans, the focus remains on safeguarding essential resources for vulnerable populations while addressing the challenges posed by evolving criminal tactics in the digital age.