News - General

WIC Programs are taking the leap towards EBT.  Currently, there are not many viable transferable systems, which fully accommodate EBT functionality.  The New Mexico system written in PowerBuilder and created in the late 90’s will, by October 2009, be in full or part, transferred into Wyoming, Isleta Pueblo, and Cherokee Nation WIC Programs. 

Programs such as Michigan, Kentucky, and Chickasaw are working with and developing systems for online EBT.  Michigan, at the time of the writing of this blog, is in the last phase of statewide implementation while Kentucky’s OWE system is entering into it’s early pilot phases.

When other viable systems appear on the market providing EBT these capable systems WILL be transferred into state WIC Programs.

Where are the benefits:
EBT provides WIC benefits on an electronic Food Issuance device the two prevailing technologies are referred to as “online” or “offline”.  The offline system provides WIC benefits on a smartcard, the client inserts the card into compatible card readers, enters a PIN and benefits are written to the card, enabling the card as the most up-to-date record of client benefits.  Clients then use the smartcard to purchase allowable foods and the information stored on the card is used to approve food purchases. 

In the online environment, benefits are stored within the client-benefit data system, (which is either hosted within the state environment or contracted externally) and accessed using a magnetic stripe card.  When a client purchases allowable food items, the participating vendor verifies the transaction similar to a credit card transaction in that information is passed over the processor network.  However, the difference is that the information being requested from the client-benefit database is not a verification that payment is available, it is a request for the client’s currently available food prescription in its entirety, or a request to know whether each scanned WIC-able item is available and unredeemed in the requested amount.  For example, are there cereal benefits and how many ounces?  The vendor location and specifically vendor systems remain the “Wild West” of the online WIC EBT environment.  Few vendors have integrated register systems for online states.  The term integrated suggests that the EBT sale occurs simultaneously with the ‘regular’ grocery transaction is which are processed through the vendors Point Of Sale (POS).  Stand-beside means that there is a separate piece of equipment next to the store register, which is specific to WIC program clients.  Often, stand-beside requires an additional scan, meaning, first the item is scanned through the WIC equipment, then again through the grocer register.  Some companies are implementing integrated WIC payments for the online environment, this should bolster online’s credibility.

In an integrated state/program environment, clinic personnel certify the client; the system is aware of the qualifying factors of the client(s) and certify the client against a specific food package or prescription.  This food package is then saved to:
1. The account database for online access to client accounts, alternatively,
2. Offline systems the food package is written to a smart card via payment terminal or other solution.

Currently, the offline industry is about to receive a refreshing alleviation from the need for very expensive ($600 each) payment terminals used to write benefits to the cards in the clinic location.

The basic solutions replace the current security methodology, which focuses upon security keys, which authenticate the smartcard and the payment terminal, which exists at each user station in offline clinics.  These terminals provide logical access to the cards as an intermediary between the clinic software application and the physical card.

The functions of the terminals is to provide directly relate to management and manipulation of the keys in addition to ‘securely’ storing such keys.  This functionally and responsibly is transferable to a physical device specially designed to store and handle key diversification.  Further, the devise can be made available over a LAN, ensuring each workstation instance an access the functionally it’s offering via the LAN without additional costly physical equipment needed. 

Finally, inexpensive smartcard reader/writer terminals connected via USB will be employed to provide access to the cards using a software interface or clinic application module marrying the clinic application, the hardware key management device, and the card reader/writer terminal.  This type of solution is an example of the developments and economies occurring and which are bringing down the costs of WIC EBT.

How are benefits redeemed?
Participating EBT vendors are currently operating in either an offline or online state.  However in the future, the assumption is that vendors will border or exist, operationally, in areas that serve both off and online states. 

Vendor authorization is handled by state agencies.  Vendor’s systems must Level II certified vendor cash register systems and must achieve Level III certification from the state agency.  Certification Level II is a USDA certification, which proves that the system meets required standards for register systems operating on WIC programs.  Level III certification is performed by state agencies and verifies that vendor systems work with the state specific configuration.  Certification Level III checks system ability to:
• Span befits at midnight transactions
• Appropriately recognize program approved foods
• Appropriately update cards with benefits
• Allow PIN entry
• Assign a PIN block, attempts acceded
• Connect to FTP services
• Submit claims for settlement
When vendor systems are certified, they are allowed on EBT WIC Programs and can process EBT benefits and claims. 

In the offline environment, clients select approved items in the store.  When a smartcard is inserted into the card reader, the vendors terminal manages the cryptographic keys required to open the users account with proper entry of the card’s PIN number.  Vendor systems have Approved Products List (APL) loaded into their master register terminal and copied or available to all registers.  When the register recognizes that it is processing a WIC transaction it will look to the available benefits on the card, compare items being scanned or having been scanned and determine when a positive match exists between available benefits, of approved items with matching UPCs in the APL.  When a positive match condition exists a beep on the register will signal such, or upon tender, the register will sort the items matching positively into a WIC tender type.  The client is posed with a decision to accept or decline the reduction of their benefits.

In the online environment register systems gain access to the clients when the magnetic stripe cards is swiped and the appropriate PIN is entered, which is protected using the X9.24 standard and Triple Data Encryption Algorithm or ‘Triple DES’ encryption.  The exact method store systems employ in managing and viewing the prescription varies.  Some systems will download the client’s entire prescription and some will check at the item level for availability as items are scanned.  Those who check at the item level may use ‘Prediction’ or an educated guess as-to what is a WIC item, while others may download and make a comparison to the APL such as discussed previously in the offline environment. 

When items in the online environment are determined to be, both existent in the list of WIC approved foods, and be existent in the clients WIC prescription it is applied to the clients WIC purchase for approval.  The online system will process this transaction with a Purchase Message, rather than a batched claim file.

How offline grocers are paid:
Offline EBT Settlement of grocer claims for EBT WIC includes an interface between grocers (vendors) who accept WIC EBT benefits and the WIC state agency or payment processing entity that handles those claims.

A WIC clinic application issues food benefits to a client or family group who redeems those benefits at a state WIC approved grocer location.  Grocers system’s stores WIC purchases/redemption information.  Most often, during nightly settlement or close out, the vendor’s system delivers redemption information in the form of a claim file to a File Transfer Protocol (FTP)  server maintained by the payment-processing agency, which can be a state program or third party vendor.

After clients have made purchases at vendor locations in an offline environment, vendors will send a claim file up to the state or processor. 

The offline settlement system validates vendor claims, sends reconciliation files from claim files to the WIC FTP site for vendor pickup, reimburses grocers through an Automated Clearing House (ACH) file, and sends reconciliation information to the WIC EBT system.

In addition to issuing benefits, the WIC EBT application, in an offline environment maintains a list of invalid smart cards referred to as the Hot Card List (HCL) and a list of approved UPCs and PLUs of all WIC authorized foods. The Settlement System is responsible for delivering these reference files to the vendors via the WIC FTP site.  Whereas, in an online environment vendors receive notification if a card was inactivated by the clinic for some reason when the card is swiped and the PIN entered.

Communication between Vendor systems and the Settlement system and between Settlement and WIC EBT is via interface files, as shown in the following high-level diagram.

The Settlement system runs as a series of services on a Windows or other server, hosting the Settlement modules and most likely and frequently a SQL Server.  An IIS, Apache, or other web server supports a web based Settlement console application. This interface module enables creation of vendor transaction adjustments by the WIC Program, reconfiguration of system timing parameters by program or 3rd party vendor staff, in addition to various other functions.

The Settlement system will most often maintain a database, which tracks all transactions, and updates, which are processed by the system.  The database will contain record level detail of each vendor claim, auto-reconciliation response to the vendor, and requests for payment sent by ACH file to the bank in effort to maintain auditing trail. 

The integrated environment for a WIC system that issues EBT issuance benefits and settles claims in the same environment may look like the high-level architecture provided below:

NOTE: The connection from the clinic database and the state database in this example is a bi-directional replicated link providing that the state host and clinic databases share client record data.  This dually located database provides functionality allowing clinics can operate in a network down status regardless of the state host’s availability.  They can modify and create records locally. 

How online grocers are paid:
Online grocer payment is less rigid than offline EBT; this is NOT of necessity a bad thing.  The online environment greater flexibility in its structure and implementation, therefore, each implementation tends to vary slightly.  The basic idea is such that claim files are not needed in the online environment.  This is because as transactions are occurring there is communication over the grocer’s network or processor to the state host machine.  The state host machine is adjusting Not To Exceed (NTE) values, providing available prescription data, and is working to assist the POS with aggressive redemption of benefits, ensuring the client receives the most benefit from their WIC prescription.  When a Purchase Message is created, the benefits are removed from the family group record and current available benefit is reduced.  This information is stored on the host servers by vendor by family group.  The state will perform reconciliation and aggregation of claims by vendor and will interface with the vendors banking entity to process payment to the vendor. 

WIC EBT is a technology that is proven and undergoing continual improvements thus achieving continued benefits and economies.  Offline and Online are both very viable implementations of EBT.  At the time of the writing of this paper, the primary driving factors behind the selection of the technologies have to do with geographic driven network availability and quality, and integrated vendor systems.