Dive Brief:

• Sam's Club announced earlier this week it is now accepting Electronic Benefits Transfer (EBT) payments for SNAP participants with its Scan & Go service at participating locations. 
• BJ's Wholesale Club is continuing its rollout across states of SNAP online purchasing for its site. At the end of January, SNAP recipients in Massachusetts gained access to the payment option on the club.
• The presence of two major club retailers growing digital payment options for SNAP participants continues the expansion of EBT online purchasing across the grocery industry and increases competition among retailers for SNAP dollars.

Dive Insight:

EBT acceptance for online payment has been exploding since last year as more states have signed on to the USDA's SNAP Online Purchasing program and more retailers have gone through the required certification process. 

Walmart and Amazon initially dominated the online landscape for SNAP recipients, but now national and regional chains, along with independents, are gaining access to SNAP recipients' dollars online, furthering the adoption of digital shopping. 

EBT online payment is another tool for BJ's to continue courting members who are SNAP recipients. BJ's has seen its penetration of EBT members increase in the last several years, and those shoppers have given BJ's a boost with the stimulus dollars they received from the government, Robert Eddy, BJ's president and CEO, said during the club's fourth-quarter earnings call last week. 

"However, these members are good members in any environment. Even without the extra stimulus of the pandemic, they visit us often, they shop a lot, they renew their memberships, and so it's important that we try and focus on retaining these members," Eddy told investors on the call. 

While Eddy expects SNAP recipients won't have as much spending power as they did previously from stimulus checks, he said BJ's is working to retain them as members going forward. 

BJ's began its multi-phase rollout of SNAP online purchasing early last year in Florida and North Carolina. By August, BJ's had made the payment option available for customers in nine states. 

With the addition of Massachusetts, BJ's says it now accepts SNAP online purchasing in 13 of the 17 states it operates in, and customers can choose from free pickup, shipping and same-day delivery. "More states and delivery methods will be added soon," BJ's website notes. 

Meanwhile, Sam's Club says it doesn't allow SNAP recipients to use EBT for purchases on its website, but its venture into digital EBT payments for Scan & Go service points to a new avenue that grocers can explore to further expand payment options for people receiving government assistance.  

Sam's Club's Scan & Go allows shoppers to use the retailer's app to scan product barcodes and find items and then pay in the app when they're done shopping. Shoppers then show a digital receipt to associates on their way out. 

Lars Rehder, principal product manager at Sam's Club, wrote in a blog post that the retailer received requests from members for EBT as a payment option for Scan & Go, and the retailer started considering adding the payment method to it "a few years ago."

Rehder said the club waited for parent company Walmart to complete its initial tests with the USDA on digital EBT payment before tackling it head-on. Sam's Club worked with its in-club team, its internal checkout service which handles interactions with the payment processors who manage each state’s SNAP program and with FNS on the project, Rehder noted. 

"First and foremost, we wanted to be sure the user experience with EBT SNAP was simple, accessible and seamless," Rehder wrote, noting that members are quickly "embracing" EBT SNAP with Scan & Go. 

Rehder did not disclose how many Sam's Club locations offer SNAP purchasing with Scan & Go, but the USDA's website says Sam Club's Scan & Go with SNAP purchasing is available in 43 states. (Sam's Club has stores in Montana, which does not allow SNAP online purchasing.)

Costco, the other major player in the U.S. club retailer trifecta, allows EBT payment in-store but does not list it as an accepted payment method for online transactions.