SNAP Bill Bans Processing Fees for Retailers, But Equipment Rental Costs Could Still Linger

The newly proposed Ensuring Fee-Free Benefit Transactions Act of 2025 aims to cut a specific cost for grocery stores and retailers that accept SNAP (Supplemental Nutrition Assistance Program) benefits. Essentially, this bill bans states or their contracted payment processors from charging retailers any fees just for running a basic EBT transaction—think of those pesky "switching" or "routing" fees that move the money from the government to the store. This change is set to kick in on October 1, 2025, and it overrides any conflicting rules established in the 2023 Consolidated Appropriations Act (Sections 2 and 4).

The Fine Print: Where the Fees Go

For a small business owner—say, a local corner store or a farmers market vendor—this is a win because it takes away a specific operational cost that can make accepting SNAP benefits less appealing. The idea is to keep the core transaction costs from being passed on to the retailers, which helps ensure that people who rely on SNAP can still shop at their local spots. If these processing costs are too high, stores might choose not to accept EBT, which limits food access for recipients.

The Equipment Rental Loophole

Here’s where the bill gets interesting, and frankly, a little murky. While Section 2 bans those transaction processing fees, it carves out a major exception: fees for renting the equipment needed to process the SNAP transactions are still allowed. This means the state or its contractor can still charge the retailer for the physical card reader, the terminal, or any related hardware. This is a crucial detail because it means the process isn’t entirely "fee-free" for the retailer, despite the bill's name.

The Real-World Cost Shift

This exception creates a potential cost shift. The payment processors who lose the ability to charge transaction fees might simply inflate the rental costs for the necessary EBT equipment to make up the difference. If you’re a small retailer, you might not be paying a switching fee anymore, but you could see a hefty monthly bill for the card reader itself. The bill doesn't define what constitutes a "reasonable" rental fee, leaving the door open for potential disputes or cost hikes that retailers will have to absorb. While the bill solves one problem (transaction fees), it leaves the other (equipment costs) unchecked, meaning the overall financial burden on retailers might not change as much as the headline suggests.