Farmstead-delivery box-groceries-Nov2021_0.jpg Farmstead
Forage has worked with online grocer Farmstead and independent grocer Gong's Market to enable SNAP EBT functionality for online grocery purchases.

Forage approved as online SNAP EBT payment enabler

Tech startup added to USDA’s roster of third-party providers for grocers

Forage has become an authorized third-party provider (TPP) for enabling grocery retailers to accept electronic benefits transfer (EBT) payments for Supplemental Nutrition Assistance Program (SNAP) online grocery purchases.

San Francisco-based Forage said Monday that the approval from the U.S. Department of Agriculture — whose Food and Nutrition Service (FNS) administers the SNAP online purchasing program — makes it one of only three authorized online EBT secure PIN encryption TPPs. The others are Fiserv (PaySecure) and FIS Global (Worldpay).

forage-shopify-ebt-screenshot-1.pngForage's solution is one of three third-party platforms approved by the USDA for online grocery SNAP EBT payments. (Image courtesy of Forage)

Forage noted that its platform makes it easier for grocers to take EBT payment for online purchases from SNAP customers, giving them access to a $200 billion market and enabling the 42 million Americans receiving food stamp benefits to spend them online. The technology startup last week reported that it secured $22 million in funding from Nyca Partners, PayPal Ventures, EO Ventures and Instacart founder Apoorva Mehta, among others.

“Forage has been working towards USDA certification for months, and we’re thrilled to be one of only three companies to date that have met this high bar,” Forage CEO and co-founder Ofek Lavian said in a statement.

Under the SNAP Online Purchasing Pilot, launched by the USDA’s FNS in April 2019, 49 states (except Alaska) and the District of Columbia now allow SNAP beneficiaries to shop and pay for groceries online. Amazon, Walmart and Aldi are the only grocery retailers enabling SNAP online grocery shopping on a national scale. A number of chains, as well as Amazon, also accept SNAP EBT payments for online grocery orders, including through Instacart.

The pilot stems from the 2014 Farm Bill, which authorized the USDA to test online purchasing for recipients before rolling it out nationally. FNS, which administers SNAP, issued a call for retailer volunteers for the pilot in September 2016 and then in January 2017 offered participation in the initiative’s first phase to Amazon, Walmart, ShopRite, Safeway, Hy-Vee, FreshDirect, Dash’s Market and Wright’s Markets. Dozens of chain and independent grocers now take part in the program.

Forage began working with USDA in 2021, and the company’s first merchant collaboration went live earlier this month. Gong’s Market, a family-owned grocer based in California, leveraged the Forage app for Shopify, and Forage worked closely with Shopify Plus partner Grocerist on the project. Grocerist offers a solution fully customized for grocers on Shopify. Forage, which provides project management, documentation support and technical assistance to its merchant and platform partners, said it’s working with many other grocers to help them start accepting SNAP EBT online. In addition, Forage has worked with e-grocer Farmstead since late last year to enable SNAP EBT acceptance, which would make Farmstead the first online-only grocer with that capability.

“Our focus now is on ensuring the success of our merchant partners as they go live with online EBT acceptance in the coming weeks,” added Lavian, who joined Forage in March as chief operating officer after serving as head of product and commerce payments at Instacart. Forage’s in-house team of EBT and payments experts includes former Instacart and Freshop employees, and Forage also recently launched the first Shopify app that offers online EBT payment processing to Shopify’s ecosystem of merchants.

One in eight Americans receive government assistance to buy groceries, and although more than 250,000 brick-and-mortar locations accept SNAP EBT benefits in-store, only a fraction have been approved for online EBT, Forage reported. Forage said the online option also helps SNAP recipients who are homebound, lack transportation, live in a food desert or want to avoid in-person shopping because of COVID-19. Also, many Americans shifted to online grocery shopping during the pandemic, but most SNAP recipients were unable to use their benefits online.

“This news is a huge win-win for both retailers and consumers,” commented Joel Berg, CEO of Hunger Free America, a nonprofit direct-service and advocacy organization. “Giving more SNAP EBT recipients the ability to order groceries online, especially coupled with home deliveries, should be a much higher priority in the grocery industry. With this new approval, Forage will help more food retailers do well for themselves while doing good for their communities.”

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