Overview: How EBT, Credit & Debit Cards are Used at Market

• The POS machine is typically operated at a central location by market staff or a trained volunteer. 

• The customer brings their card to the info booth and tells the market representative how much they want to spend. The market rings up the sale and swipes the card, and the customer enters their confidential PIN number (EBT or debit) or signature (credit).

Purchasing a POS machine

Markets can obtain point-of-sale (POS) machines by buying them from companies called, variously: “3rd party processors,” “merchant services providers,” or “POS providers.” Anytime a sales transaction takes place (at a farmers market or any sort of retailer) these companies are responsible for moving funds from the customer’s EBT, debit, or credit card account over to the retailer’s bank account. Providing this service costs money and companies charge annual or monthly fees, plus transaction fees, along with the cost of buying the POS machine itself.

When shopping for a POS machine, consider these questions:

• Does your market want to accept SNAP only; SNAP and debit cards; or SNAP, debit and credit cards? Each has different associated costs depending on the POS provider and the number of transactions a market has.

• What are all the fees the POS provider charges? Usually there are fees per transaction plus a monthly or annual fee. There may be others depending on the company.

• Length of contract – what is the minimum and maximum available – how does that affect pricing?

• Can you deactivate the machine during the off-season? And how much will it cost to re-activate it next year?

• What cellular network does the POS machine use (such as AT&T, Verizon, etc.), and will it get excellent reception at your market’s location?

• How many steps does it take to complete a sale using the POS machine offered?

• Does the company offer convenient one-on-one training on how to use your POS machine?

• Is there a 24-hour help hotline, in case you have technical difficulties at market?

• Does the company provide paper vouchers for use during system outages or if your machine isn’t working, and does the POS machine have a function that allows you to “clear” paper vouchers? (If there is a problem and you can’t make your machine work on market day, using paper vouchers is a temporary solution for the day, but only if the POS machine has this functionality.)

• How long does it take for the sales money to appear in your bank account?

• Will you receive a clear, easy-to-read monthly statement from your POS provider and do they offer easy, online access to your account?

Equipment Fees

Purchasing a machine can cost $500 – $1000. Like all electronics, it will become obsolete or damaged after time and markets should expect to need a new machine every five years or so.

Data Rates

A monthly cost for the data plan so that your machine can process sales wirelessly. Typically with AT&T or Verizon, the cost is about $30 - $50 per month.

Monthly Fees

POS providers often charge some type of monthly fee, usually between $10-$50, depending on what is included and what they break out into separate fees.

Transaction Fees

POS providers apply a transaction fee, a cost every time a card is swiped through the machine. Transaction fees will be the largest charge to your market, making it important to get a quote for what these will be and understand how they are determined. There are differences in the transactions fees for EBT cards and credit/debit cards.

EBT Cards

Companies usually charge the market a simple fee of between .10¢ to .20¢ per sale.

To estimate EBT transaction fees for your market, take the POS provider’s quote and extend that by the average number of EBT sales per market day and the number of weeks in your season. For example:

.15¢ X 30 sales per day = $4.50 per market day

$4.50 X 18 week market season = $81 per year in EBT transaction fees

Credit & Debit Cards

the fees charged are often a combination of a percent of the sale plus a flat rate charge. Examples are: .15¢ per transaction + 1.79% of the sale, or .10¢ per transaction + 2.6% of the sale.

The actual amounts will differ between POS providers depending on what scheme they use to determine their rates. Some do a different rate for each type of card (credit or debit; visa, mc, disc, or amex; swiped or keyed transactions; rewards or not; etc., there are hundreds of different types of cards!) and will quote you an average. Others bulk up all the types of cards and charge one rate no matter which type is used.

To estimate credit/debit transaction fees for your market, take the POS provider’s quote and plug in your market’s average sale amount, and then extend that by the average number of sales per market day. For example, for an average sale of $25:

$25 X 2.6% + .15¢ = .80¢

.80¢ X 30 sales per day = $24 in transaction fees per market day

$24 X 18 week market season = estimate of $432 per year on credit and debit transaction fees

• Here is an example reimbursement form to use with vendors to track the tokens they turn in.

• Markets that have the funds to do so may reimburse vendors at the end of every market day (Before token funds are actually deposited into the market’s bank account. Remember: It takes at least 48 hours for funds to be deposited from the POS provider).

• Most markets reimburse vendors on a weekly or monthly basis. Or they may ask their vendors to collect tokens until a certain amount, say $100, is reached before reimbursement.

• Markets may reimburse with cash, check, or by crediting funds toward market fees.

• It is important to keep precise records. Well defined accounting procedures and adequate staffing is crucial to the success of offering EBT, debit and credit. 

• In what is usually is a weekly task, the market manager or other staff with a financial or bookkeeping role typically handle token finances. Depending on the number of transactions and the quantity of tokens needing to be counted, this process can take several hours to a day’s worth of work.

• Make sure that all vendors and market staff are properly trained in the rules and regs for how tokens are used and reimbursed. OFMA has guidance on how to train up your market to use tokens.