The Trump administration advanced a major security upgrade for the Supplemental Nutrition Assistance Program this week when the U.S. Department of Agriculture issued a proposed rule requiring every state to transition to chip-enabled Electronic Benefit Transfer cards.

The measure targets widespread card skimming that has allowed criminals to steal hundreds of millions of dollars in benefits intended for low-income American households. A recent ProPublica investigation documented $470 million in SNAP benefits stolen electronically last year alone, primarily through outdated magnetic-stripe technology.

Under the proposed rule released October 23, states must adopt cards with embedded microchips and contactless tap-to-pay features within two years of finalization. Retailers accepting SNAP benefits would also need compatible payment terminals. The USDA estimates the changes will cost $283 million federally and at the state level while delivering at least $1.5 billion in prevented losses over the next decade.

The announcement builds on separate enforcement actions announced the prior week. The Justice Department, USDA, and USDA Office of Inspector General reported actions against more than 40 defendants in schemes causing nearly $45 million in intended losses, with nearly $42 million tied to fraudulent SNAP benefits. Several cases involved illegal immigrants using stolen identities, including those of deceased U.S. citizens.

DHS Secretary Markwayne Mullin stated that the programs exist for Americans only. Attorney General Todd Blanche emphasized that the schemes robbed taxpayers and struggling families alike.

Fewer than one-third of states currently use or are implementing chip cards. The mandate aligns with broader Trump administration efforts to eliminate fraud, waste, and abuse in federal benefit programs, including through Vice President J.D. Vance’s Task Force to Eliminate Fraud.

The rule also includes stronger PIN requirements and options for card locks that restrict purchases outside a recipient’s state or online. Officials noted the upgrades mirror security standards long standard on credit and debit cards.