NEW YORK (AP) — Amazon and Walmart on Thursday kicked off a two-year government pilot program allowing low-income shoppers on government food assistance in New York to shop and pay for their groceries online for the first time. ShopRite will join the two retailers on the program early next week, said the U.S. Department of Agriculture, which oversees the Supplemental Nutrition Assistance Program, or SNAP.
The USDA has long required customers using electronic benefits transfer, or EBT, pay for their purchases at the actual time and place of sale. So the move marks the first time SNAP customers can pay for their groceries online. ShopRite and Amazon are providing the service to the New York City area, and Walmart is providing the service online in upstate New York locations. The agency said the pilot will eventually expand to other areas of New York as well as Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington.
The pilot program will test both online ordering and payment. SNAP participants will be able to use their benefits to purchase eligible food items but will not be able to use SNAP to pay for service or delivery charges, the agency said.
"People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food — by ordering and paying for groceries online," said USDA Secretary Sonny Perdue. "As technology advances, it is important for SNAP to advance too, so we can ensure the same shopping options are available for both non-SNAP and SNAP recipients."
Perdue said he will be monitoring how the pilot program increases food access and customer service, specifically for those who have trouble visiting physical stores. Roughly 38 million individuals receive food stamps in the U.S., according to the USDA. Nearly $52 billion, or 82 percent of all food stamp dollars, were spent at big box stores and grocery chains in 2017, according to the most recent USDA data.
The 2014 Farm Bill authorized the USDA to conduct and evaluate a pilot program for online purchasing prior to national implementation. The USDA says the move was intended to ensure online transactions are processed safely and securely.
Seattle-based Amazon said those who qualify don't need to be Prime members to buy groceries with their benefits. They'll get free access to its AmazonFresh service, which delivers meat, dairy and fresh produce to shoppers' doorsteps. And they'll also be able to use Prime Pantry, which delivers packaged goods like cereal and canned food.
However, they'll need to spend over a certain amount to qualify for free shipping: $50 at AmazonFresh and $25 at Amazon.com. The online shopping giant launched a website, amazon.com/snap , where people can check if they qualify. Amazon said it's working with the USDA to expand service to other parts of New York state.
Amazon.com Inc. was on the initial list for the government pilot program, and Bentonville, Arkansas-based Walmart Inc. made the list later. The world's largest retailer, however, in late 2017 had started allowing customers in limited locations to order items through its online grocery pickup service and then pay for it in person at the stores.
"Access to convenience and to quality, fresh groceries shouldn't be dictated by how you pay," Walmart said. "This pilot program is a great step forward, and we are eager to expand this to customers in other states where we already have a great online grocery." Walmart said that nearly 300 locations with grocery pickup in the states will be part of the USDA government program.
AP Retail Writer Joseph Pisani in New York contributed to this report.