Lockheed Martin IMS, a leading technology supplier for human services programs, has signed Verifone Inc. to supply up to 50,000 electronic benefits transfer terminals.
The seven-year deal to deliver terminals in 15 states was announced this week, to coincide with an Electronic Funds Transfer Association conference on EBT.
About half the states are wired for the electronic delivery of food stamps and other government payments, and Verifone is a terminal supplier to many of them. The deal with the Lockheed Martin Corp. subsidiary puts Verifone in a strong market position, especially given the anticipated migration to smart cards.
"As EBT goes into the next generation, (Verifone) will help provide a seamless bridge for the technology installations needed," said John Wojcik, director of business development and government programs at Verifone, a Hewlett-Packard Co. unit. "I see it as a major opportunity for all of us, as the speed of this thing has picked up."
Lockheed Martin IMS, a Teaneck, N.J., unit of the Bethesda, Md., aerospace company, is a subcontractor of Citicorp Services Inc., the leading EBT processor. Lockheed also has EBT contracts of its own in Oklahoma and the District of Columbia.
"Our goal is to provide the best possible service to tens of thousands of clients who regularly use benefit cards," said Naomi Marr, vice president and chief operating officer of the Lockheed Martin children and family services division.
The Verifone 33O terminals handle standard magnetic stripe cards but can be easily adapted for smart cards. "The technology is here," Mr. Wojcik said.
State EBT administrators attending the EFT Association conference have expressed concerns about the costs of upgrading to smart cards. Verifone's system is supposed to address those infrastructure questions and allay merchants' worries about needing extra terminals on their countertops.
Robert Bucceri, president of Chaddsford Planning Associates of West Chester, Pa., said vendor flexibility is crucial. "You are planning today for a market in five years that might not be the same," he said.
Some conference attendees said Verifone's dominance in EBT terminals could make it hard for other companies to gain market share. Hypercom Corp. of Phoenix has supplied units to New Mexico, and DataCard Corp. of Minneapolis has a contract to supply terminals in Michigan.
To date, Verifone has deployed about 100,000 point of sale terminals specifically for EBT acceptance. Mr. Wojcik said the company has "a way to do it and to do it trouble-free-from the small mom-and-pops to the large retailers."