KROGER GETS SET FOR EBT ROLLOUT IN FIVE STATES

CINCINNATI -- Kroger Co. here can now accept electronic benefits transfer payments in selected stores in Alabama, Georgia, Illinois, Louisiana and Missouri.Approximately 40 stores in these states are currently equipped to accept EBT payments, according to a source familiar with the situation. More stores will be added as EBT programs roll out to different counties within these states.In these stores,

CINCINNATI -- Kroger Co. here can now accept electronic benefits transfer payments in selected stores in Alabama, Georgia, Illinois, Louisiana and Missouri.

Approximately 40 stores in these states are currently equipped to accept EBT payments, according to a source familiar with the situation. More stores will be added as EBT programs roll out to different counties within these states.

In these stores, Kroger will accept EBT benefits delivered via a magnetic-strip card similar to a bank card, said Paul Bernish, director of public relations at Kroger. This method does not require an extensive investment in new front-end technology.

EBT pilot programs are already under way in many areas around the United States. Kroger treasurer Larry Turner estimated that 25 to 30 states are at one stage or another with EBT projects. He said Kroger's involvement would be "all across the board."

While most states use magnetic-strip cards to deliver EBT benefits, Ohio and Wyoming are delivering EBT via a smart-card system, said Bernish. These states provide smart-card reader equipment to retailers based on their food stamp volume.

Federal and state governments are moving toward EBT as a method of distributing programs such as food stamps and Women, Infants and Children benefits, said Turner, noting that supermarkets must be ready to handle the changeover.

"The government's goal is to try to transfer as many of what we call transfer payments to a nonpaper environment as quickly as possible," Turner said. "This is just the first of a lot of these types of benefits transfer programs. So ultimately we may see people getting their social security check on plastic instead of in a check or a direct deposit to the bank."

With EBT, states typically choose certain counties as pilot areas, rolling out programs county by county. States also generally choose a third-party institution to house the accounts of welfare and Medicaid recipients and to issue the cards. All third-party processing companies must be certified in order for them to be used by merchants.

Kroger is using Midwest Payment Systems, a subsidiary of Fifth Third Bancorp here, as its EBT transaction processor in the five states. All of Kroger's retail divisions also use MPS to handle their commercial debit/credit transactions.