As card readers that attach to mobile phones continue to make headlines in the payments space, an Austin, Texas-based software company is putting a new spin on the trend.
The Novo Dia Group has developed an application for Apple Inc.’s iPhone that enables merchants to accept payments for the Special Supplemental Nutrition Program for Women, Infants and Children, commonly referred to as WIC, a federal assistance program for health care and nutrition for low-income pregnant women, infants and children younger than 5.
The application is compatible with VeriFone Holdings Inc.’s PayWare Mobile device, a card reader that slips around an iPhone. Farmers’ markets in Michigan soon will test the software as part of the state’s efforts to make fresh produce more readily available for WIC electronic benefits transfer recipients.
Michigan is one of three states that support WIC EBT. Kentucky and Nevada are the others. Consumers may use WIC EBT cards at eligible participating food sellers.
Novo, which already provides backend support for Michigan’s WIC EBT system, believes more states might consider switching from WIC vouchers to magnetic stripe cards if mobile payments become an option at such places as farmers’ markets.
“WIC EBT is still a fairly immature market,” Josh Wiles, Novo senior partner, tells PaymentsSource. “If this takes off, it can open up the farmers’ markets to accept WIC.”
Novo expects the trial to last through July, and it will use what is called the harvest season (August and September) for a live rollout. Farmers’ market vendors who want to use VeriFone’s PayWare may purchase the device at a reduced rate if they accept WIC EBT, Wiles says. A cost structure has not been finalized.
The Michigan WIC office was unavailable to provide further details about the trial.
Novo worked closely with VeriFone to develop the application. “We were able to code the software to their specifications so that we can interface with that device,” Wiles says.
Novo plans to make the application available on any smartphone and make it compatible with other mobile card readers such as device sold by HomeATM ePayment Solutions.
WIC EBT has faced many challenges such as funding problems the past eight years, says Bob Bucceri, a general partner for West Chester, Pa.-based consulting firm Chaddsford Planning Associates LLC.
Subsequently, some states that have experimented with WIC EBT returned to distributing vouchers.
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, told PaymentsSource last year. States receive federal grants for WIC.
The New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) also returned to vouchers in January 2006 because of resource problems.
Adopting commercial payment structures such as mobile payments may give WIC EBT a boost, Bucceri says. “When the EBT concept was envisioned years ago, it was thought [states] would adopt commercial payment structures,” he says. “As mobile payments become more mainstream, we’re going to see more developments like [Novo’s].”
Bucceri estimates some 25 to 30 states are planning or are thinking about switching to WIC EBT in the near future.
