Alabama joins early state efforts to launch chip-enabled EBT cards
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California and Oklahoma also lead the nation in EBT card modernization efforts intended to stamp out costly benefit fraud and theft.
Alabama has become one of only three states in the nation to roll out electronic benefit transfer cards with chip technology in an effort experts say can help state governments prevent fraud and lower error rates ahead of H.R. 1 requirements.
The Alabama Department of Human Resources began mailing the chip-enabled EBT cards to beneficiaries of programs like Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families, state officials said in an announcement this month. The statewide launch follows a pilot program conducted in December in 11 counties.
The chip technology offers a more secure payment option for cardholders that is less susceptible to skimming, a form of theft where a bad actor can install a device onto a payment terminal that collects the card’s information, said Denise Adaway, director of account management at Conduent, the company partnering with Alabama to deploy the new EBT cards.
“When the card is secure, the benefits are secure, leaving EBT clients with peace of mind and knowing the benefits are going where they are supposed to go,” said a spokesperson for the Alabama Department of Human Resources in an email to Route Fifty.
In Alabama, more than 750,000 residents use EBT cards to access SNAP benefits. Since 2023, more than $15 million in funds have been stolen from approximately 41,000 recipients, and the state saw more than 26,000 benefit fraud claims in the first quarter of 2025 alone.
Nationwide, an estimated $233 million in SNAP funds could end up being lost to bad actors between October 2024 and October 2026 without more secure anti-fraud measures such as chip technology, according to recent findings released by the Agriculture Department’s office of inspector general.
For all states, “fraud is top of mind all day, every day,” particularly as they face more stringent benefit administration rules from the federal government, Adaway said.
For example, Alabama’s deployment of chipped EBT cards comes as states are expected to reduce their error rates of benefit administration under H.R. 1 requirements, which stipulates that states’ share of SNAP payments will be determined by their payment error rate, said Anna Sever, president of government solutions at Conduent.
“States are trying to proactively use [chip] technology to drive down error rates,” which could be “financially devastating” otherwise, she said. The new error rate requirements could cost Alabama an additional $200 million, Rep. Andy Whitt, R-Harvest, told Alabama Daily News.
California and Oklahoma are also leading the nation in EBT card modernization efforts, with the states announcing their transition to chip technology last year.
In addition to potential cuts to federal support under H.R. 1, states are seeking long-term solutions to benefit fraud and theft after federal reimbursement for stolen SNAP benefits ended in 2024.
“Rather than just replenishing the benefits for fraudsters to come in yet again and take those funds, [chipped cards] really get at the heart of the fraud … where it starts,” Adaway said.
Indeed, “we have added several security measures based on client recommendations and the Department’s ongoing research,” the Alabama DHR spokesperson said.
The new chip-enabled cards, for instance, are programmed to automatically block out-of-state and online transactions, unless the cardholder approves such payments through their benefit portal or app. State officials have also encouraged beneficiaries to lock their EBT cards when not in use to further prevent their unauthorized use.
Such efforts have resulted in “a significant difference in out of state spending, so the impact is there, and we will continue to track this as well as reports from clients,” the Alabama DHR spokesperson said. “These programs are funded by the taxpayers and as a government agency it is our responsibility to do everything we can to prevent theft of these benefits. Having accomplished this is a major success, but we are always looking for ways to improve our system.”
As bad actors’ strategies for defrauding beneficiaries grow more advanced each day, leaders are “trying to stay one step ahead of … the next thing that’s going to happen,” said Anna Sever, president of government solutions at Conduent.
Chipped EBT cards, Adaway added, are “not the silver bullet, but [they are] certainly one of the most effective tools to deal with card fraud.”
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