WASHINGTON -- Replacing food stamps with an electronic payment system can cut banks' costs substantially, according to results of a two-state test.
The U.S. Department of Agriculture said Monday that the net cost of participating in the food stamp program dropped by $3.17 for each $1,000 of benefits in New Mexico and $5.48 for each $1,000 of benefits in Ramsey County, Minn.
Bank representatives interviewed for the study unanimously said they preferred the automated card-based alternative, known as electronic benefits transfer, or EBT.
"We print more than 2.5 billion food stamp coupons a year," said Agriculture Secretary Mike Espy. "When we move to EBT, we cut down on printing all those coupons, counting all those coupons, and destroying all those coupons. It costs more than $22 million to count, shred, and burn them."