The Center for Data Innovation spoke with Justin Intal, co-founder and CEO of Forage. Forage is a U.S.-based third-party payment processor (TPP) and a PIN provider that authenticates and processes EBT transactions, which allows more merchants to accept SNAP EBT–commonly known as food stamps–for online grocery purchases. Intal discusses the goals behind Forage, the impact on grocers and shoppers, and how online shopping can improve overall access to food.
Becca Trate: The pandemic accelerated online grocery shopping and increased the number of people accessing EBT benefits. How did this lead Forage to change from a consumer-facing price comparison product to a payment processor targeting grocers?
Justin Intal: Our original product was a pricing arbitrage application to help consumers find the best prices for their items, but that could only work if the SNAP recipient could actually make a transaction with their EBT card. We felt we could make a bigger impact more quickly if we targeted the source – namely, helping more grocers accept SNAP online. 42M Americans receive EBT benefits.
While over 250,000 brick-and-mortar stores accept SNAP EBT, only about 100 retailers accept it online. The pandemic created an urgent need for customers to shop online, and EBT SNAP recipients were unable to do it. Our shift was to address a huge hurdle for SNAP EBT recipients and for grocers, who are eager to access this large market.
Becca Trate: How does your platform leverage data and automation to help grocers achieve USDA Food and Nutrition Service (FNS) compliance?
Justin Intal: The USDA created a 133-page guideline for grocers to accept payments online. There are rules around splitting tender (EBT and a different form of payment), refunds, and managing inventory for SNAP eligibility goods.
Forage has two components to assist on the above – software to help automate the process of grocers building out their business requirement document, and SNAP EBT experts to help project manage setting up the system and providing a seamless API that developers can install like Stripe. There are probably ~20 SNAP EBT experts in the U.S. Forage has three, and most of the others work at the USDA.
Becca Trate: A small number of grocers already accept EBT for e-commerce. What challenges do shoppers trying to use EBT online face?
Justin Intal: The biggest challenge right now for customers is how few retailers accept SNAP online. One in eight Americans receives government assistance to buy groceries, and many SNAP recipients are homebound, lack transportation, or live in areas without easy access to grocery stores. These recipients have no choice but to find a way to get to the store because they are not able to use their SNAP benefits online. This problem was especially acute during the pandemic when people were desperate for safe, contactless ways to grocery shop.
For the most part, the early SNAP EBT online adopters have taken a large share of the online volume. Bringing more businesses online will help expand the market for SNAP recipients.
Becca Trate: How will wider use of EBT online expand consumer access to food and change the relationship between consumers and grocers?
Justin Intal: Allowing SNAP EBT recipients to use their benefits online levels the playing field, making grocery delivery available to millions more people. It improves food access exponentially. Beyond the shoppers, SNAP EBT recipients spend $200 billion on essentials each year. Allowing for online snap payments gives grocers more access to the consumer and their whole grocery bill, and helps them reach new areas, zip codes and shoppers.
Becca Trate: How do you envision Forage using tech to help grocers understand and meet consumer needs in the future?
Justin Intal: Right now, Forage is completely focused on SNAP EBT, but in the future, we may explore improving online access for other types of government benefits.