By Will Hernandez

A lack of direction from the U.S. government is preventing the nationwide transition of the Special Supplemental Nutrition Program for Women, Infants and Children, commonly referred to as WIC, from a voucher-based system to an electronic benefit transfer one similar to other government programs such as food stamps, according to a report released last month by J.P. Morgan Treasury Services.

Though the technology exists to transition WIC to EBT nationwide, the federal government must make a financial commitment to the project to enable the transition to proceed, the report contends. WIC is a federal assistance program for health care and nutrition for low-income pregnant women, infants and children younger than 5 years old. Consumers can use WIC EBT at participating supermarkets.

"The best possible way to distribute those benefits is EBT," Brian Kibble-Smith, J.P. Morgan Treasury Services executive director of public affairs and the report's author, tells ATM&Debit News. J.P. Morgan provides WIC EBT processing for the Chickasaw Nation in Oklahoma.

Though the report outlines many cost-saving benefits of WIC EBT, some states that attempted the transition went back to vouchers because government grants did not cover the full cost of conversion.

In June 2005, Ohio WIC officials converted back to vouchers because "they did not believe they could afford EBT within their nutrition services and administration grant," the Food and Nutrition Service, a division of the U.S. Department of Agriculture, noted in an e-mail message to ATM&Debit News.

States receive federal grants for WIC, and the amount varies based on a number of variables, according to Bob Bucceri, a general partner for West Chester, Pa.-based consulting firm Chaddsford Planning Associates LLC.

The New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont) also returned to vouchers in January 2006 because of resource problems. "Important lessons were learned from WIC EBT implementations" in those states, the Food and Nutrition Service writes.
J.P. Morgan contends magnetic stripe cards are the most cost-efficient method for WIC EBT. Three states now support mag-stripe programs for the WIC EBT initiatives.

Smart cards also are starting to catch on, starting with Wyoming and New Mexico. Texas and Nevada will use them starting later this year. Smart cards for WIC programs cost approximately $3 each to manufacture compared with about 30 cents per mag-stripe card, the report says.

J.P. Morgan cites familiarity of mag-stripe cards to recipients and their compatibility with such other government programs as food stamps and unemployment benefits as a reason not to issue smart cards for WIC EBT programs.

The Food and Nutrition Service, however, is neutral regarding whether state agencies choose to use mag-stripe or smart cards for WIC EBT initiatives. "Both online and offline technology have been used by state agencies, and both have proven to be feasible and affordable," the agency says.

In January 2002, Wyoming became the first state to embrace WIC EBT, and it opted to issue smart cards under a contract with Louisville, Ky.-based Stored Value Solutions. Janet Moran, that state's WIC program section chief, says an advantage smart cards have over mag-stripe cards is, "sometimes an online system can be down and people don't have access to benefits." With a chip card, the benefits are loaded directly onto the card, she says.

Mag-stripe cards make sense for unemployment benefits because "it's like cash," Moran argues, adding, though, that perhaps "maybe we will see there isn't one way to do things." But "for the foreseeable future, we'll remain [on smart cards]," she says.

Regardless of the card technology a state uses, Kibble-Smith and Moran agree WIC EBT provides benefits both to recipients and participating supermarkets.
WIC voucher transactions can be a complicated experience that supermarket cashiers can easily mishandle, observers say. After WIC recipients receive food-package lists from a clinic, they then redeem the prescribed items from a participating retailer. With paper vouchers, the cashier must cross check the list of items being purchased with eligible products.

"A WIC transaction can be the most time-consuming transaction that a retailer can perform," Kibble-Smith says.

EBT eliminates any misunderstanding between cashier and recipient because "everything is controlled by the UPC [barcode when it is scanned at checkout], so you know they are purchasing the right products," Moran says.

Using a card also helps eliminate the embarrassment WIC recipients may experience because others in line at checkout behind them know they are receiving government benefits, the report says. 

The Food and Nutrition Service could not give ATM&Debit News a time frame for when a nationwide WIC EBT rollout could happen, but the federal government is paying attention to the program's needs.

The American Recovery and Reinvestment Act President Obama signed into law last month will provide $500 million for WIC, the Food and Nutrition Service wrote in its e-mail. "The law also provides $100 million to establish, improve or administer a management-information system for WIC, including the advancement of EBT in the WIC program," the agency added. ATM

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