The free SNAP Wireless Equipment Program may be shutting down as soon as the end of the month.
Credit: Edmund Lowe Photography

A seemingly small change in a government contract is about to majorly impact thousands of people with SNAP benefits who shop at farmers' markets—and it could all happen by the end of this month.

The USDA originally set up the Free SNAP Wireless Equipment Program to provide mobile devices to farmers' markets in 2012, and since then a company called Nova Dia has provided the software to process the federal benefits. This system allowed low-income customers to shop at farmers markets for fresh, local produce in areas that are often considered food deserts.

Novo Dia processes almost 40 percent of SNAP transactions at farmers markets around the country. According to The Washington Post, “SNAP benefits redeemed at farmers markets increased by 35 percent, to $22.4 million in 2017 from $16.5 million in 2012.”

But here’s where it gets tricky: the Novo Dia group said it will end its service by July 31—meaning about 1,700 farmers markets will no longer be able to serve low-income customers. Novo Dia’s software is the only one that works with Apple products and that can process SNAP incentives.

Josh Wiles, Nova Dia’s founder and president, says the company shut down because SNAP transactions are “highly regulated” and require expensive security measures, and the profits from farmers markets are typically small since customers are only buying a small amount of produce at a time. Plus, the new administrator of Financial Transaction Management (the SNAP equipment program) chose to work with a different company over Nova Dia.

Wiles told The Washington Post, “Once it became clear that we were not going to be part of it, we knew we would not be able to scale in a manner that allowed us to be profitable or even sustainable.”

Since Financial Transaction Management has decided to switch over from Nova Dia, it’s caused a six-month delay in getting equipment. 360 farmers' markets are reportedly on a USDA waitlist for SNAP processing equipment.

Without any processing equipment, many farmers markets are choosing not to accept SNAP benefits until they can get the tools they need—and people are definitely frustrated with the situation. 

Financial Transaction Management will reportedly begin accepting applications for new equipment and processors on July 14, but it will take several weeks to select an applicant and get the equipment and software out to farmers markets—so by the time they get the necessary tools, most farmers markets around the U.S. will probably be closed for the season.

A USDA spokesperson told The Washington Post, "The agency has been alerted of Novo Dia's pending shutdown and is 'analyzing the impact this decision will have on our program participants as well as farmers and producers.'"