SNAP Online Payments Need Specialized Infrastructure
Justin Intal, CEO of Forage, on helping online grocery platforms process EBT
This is a regulatory infrastructure market disguised as a payments API market. The hard part is not moving money, it is making every SNAP online order behave the way USDA wants, down to which SKUs are eligible, how split tender works when fees or ineligible items are in the cart, and how fraud is prevented with PIN based authentication and approved checkout flows. That is why online EBT stayed concentrated among a small set of early retailers and specialized processors, even with huge transaction volume available.
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The bottleneck starts before code is shipped. Retailers need SNAP authorization, a letter of intent, and often a Business Requirements Document and demo for USDA review. USDA also limits approved third party processors for SNAP online, which turns compliance approval into a gatekeeper, not just a feature roadmap item.
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The product itself is more complex than normal card checkout. SNAP can pay only for eligible food, not service fees, delivery charges, taxes, or many nonfood items, so merchants need item level eligibility and split tender in one basket. Forage built that workflow and automated BRD creation because this work had taken large teams at Instacart, Amazon, and Walmart months to finish.
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That is why general processors left space on the table. Payments infrastructure has become easy in generic categories, but restricted spend categories like EBT, HSA, and FSA still require narrow pipes and specialized compliance. The winning pattern is a focused provider that handles the ugly edge cases, then plugs into broader processors for the rest of checkout.
The next phase is more merchants, more grocery formats, and more vertical software platforms embedding compliant restricted spend payments by default. As online grocery keeps expanding and USDA approved processor pathways mature, the advantage shifts to the provider that can turn months of policy work, SKU mapping, and fraud controls into a repeatable implementation that feels as simple as standard payments.