Over 40 million Americans received government assistance in the form of food stamps in 2018. Food stamps, formally called the Supplemental Nutrition Assistance Program (SNAP), provide an important safety net for low-income individuals in the United States. SNAP is particularly critical for the most vulnerable members of society: two-thirds of SNAP participants are families with children and a third live in households with seniors or people with disabilities. 

SNAP recipients are issued an electronic benefit transfer (EBT) card, which is loaded with their food stamps each month. This card can be used to purchase food at qualifying retailers, typically supermarkets. SNAP benefits cannot be used to purchase alcohol, cigarettes, or non-food items. The SNAP program was designed with a simple goal in mind: feeding low-income Americans. 

However, the SNAP program was originally launched in 1939. While food stamps have evolved somewhat to meet the demands of the 21st century economy, the program still lags behind technological advancements in other sectors. Most importantly, SNAP recipients have only a physical EBT card that can be used to make in-person purchases at grocery stores. As millions of Americans turn to online grocery providers like Instacart and Amazon Fresh, SNAP participants are left out.  

SNAP recipients would receive major benefits from online grocery ordering because they are more likely than non-SNAP recipients to live in “food deserts,” areas more than one mile from a supermarket. These populations are less likely to have access to a vehicle and struggle to travel to the grocery store to buy necessary supplies with their physical EBT card. If food stamps could be used for online purchases, millions more Americans (including millions of children) would have convenient access to food.

All_ebt is a financial technology solution that allows SNAP recipients to create a digital EBT card that can be used to shop online at any retailer that accepts VISA. The All_ebt card will function similarly to Apple Pay or other digital banking card systems as a digital representation of users’ existing physical EBT cards. 

To receive an All_ebt digital card, users must possess a valid EBT card, a mailing address, and the materials needed to pass an ID verification test. Upon approval, they have access to a digital EBT card powered by Stripe and certified with all major card networks as an issuing processor. The All_ebt card will appear in Apple Pay and Google Pay, allowing SNAP recipients to shop online at any online retailer. All_ebt cards will possess the same restrictions as traditional EBT cards, allowing users to purchase eligible items but not prohibited items like alcohol or tobacco. 

All_ebt also plans to give users access to advanced banking tools traditionally off-limits to low-income individuals (who are chronically underbanked, typically due to bank account minimums). This suite of financial planning tools will allow users to maintain budgets and manage their monthly allotment of food stamps. 

All_ebt has not launched yet but is planning a pilot program in Los Angeles. Leveraging the Federal Lifeline Program Database of over 20 million potentially eligible users, All_ebt will eventually go to market as a solution for SNAP users across all 50 states. Eventually, All_ebt hopes to partner with local government services offices to advertise All_ebt to potential users making in-person visits. In addition, All_ebt has taken steps to pursue pilot programs with major grocery retailers like Instacart. 

All_ebt is available for a monthly subscription fee of $4.99 per month. This fee cannot come out of the user’s SNAP budget, but will instead be drawn from their cash assistance balance or other source of capital. All_ebt also states that it is evaluating other transaction-based business models, including a 2.9% fee and $0.30 flat fee for each transaction processed. 

The All_ebt team has won two hackathons as they continue to develop their product. The company was one of five winners of the fall 2018 YCombinator Hackathon and was the Social Impact winner and Grand Finalist of Block.one’s 2018 blockchain hackathon. 

All_ebt was founded by Eli Calderón Morin, who has worked in sales and operations at several startups exited to the likes of Amazon and Alibaba. Morin holds a BA in Arts and Humanities from the University of California, Irvine, and he is a graduate of YCombinator’s Startup School. He grew up on food stamps and is building All_ebt to solve a pressing issue that he relates to directly. 

All_ebt’s additional leadership team members are David Lam and Aaron Chen. Lam, All_ebt’s advisor and Chief Product Officer, is an experienced engineering manager and technical project manager with experience at Dell, PlayStation, and several startups. Chen is All_ebt’s cofounder contributing to engineering. A current student at the University of Washington, he lived on food stamps and relates directly to users’ pain points.

All_ebt is pre-launch, so immediate plans for growth include embarking on a pilot program in Los Angeles and working to integrate with government and retail partners. Beyond those steps, the company does not report a long-term growth plan. All_ebt’s Form C filing indicates that the company intends to devote the bulk of capital raised toward “user acquisition,” with additional line items for staffing and operations.

• Compelling social cause: SNAP benefits are meant to provide food to the neediest members of the United States population, and the program is currently failing to adjust to the modern online economy. SNAP members are shut out from convenient online grocery shopping, which is particularly vital for those living in food deserts without reliable access to a supermarket. An online EBT payment solution like that of All_ebt has the potential to give millions of Americans easier access to food, which is a noble and important social cause worth rallying behind.

• Obviousness of the solution: As described above, the SNAP program is deficient in disallowing its users from shopping online. The need for an online EBT payment method is very evident, and All_ebt is developing a simple and obvious solution mimicking Apple or Google Pay that has the potential to quickly fix a glaring issue with a core government service. While the clear need for All_ebt’s technology is one of the most compelling elements of the company’s pitch, it could also be interpreted as a risk: leading online retailers could presumably develop equivalent technology with ease, eliminating the need for All_ebt’s solution.

All_ebt’s founding team has lived on food stamps and understands the struggle that low-income Americans face in making convenient online food purchases. All_ebt has developed a simple and convincing solution in allowing food stamp recipients to access a digital EBT card, and has the potential to process several million transactions when SNAP recipients receive access to the online economy. 

However, potential investors should consider a few key risks in evaluating All_ebt. First, the company is pre-launch, which signals inherent uncertainty about the quality of its product and the product-market fit that it can achieve. Secondly, and more importantly, All_ebt acknowledges that leading online grocery retailers like Walmart and Costco could easily develop the technology to accept online EBT payments as they continue to ramp up their online grocery businesses. While a method to allow online EBT payment is an obvious and needed improvement to the current SNAP system, it is not guaranteed that All_ebt can reign as the long-term leader in the space. Finally, All_ebt’s current revenue model relies on fees charged to users. These users are low-income and would benefit from a fee-free way to transact with their SNAP benefits. A long-term solution to online EBT payments may eliminate user revenue from the equation, which could threaten All_ebt unless the company is able to pivot to alternative revenue sources. 

Exit avenues for All_ebt are not immediately clear. A payment processor like Apple Pay or Google Pay could feasibly acquire the company to receive access to its government partnerships and SNAP-recipient user list. Major online grocery retailers like Walmart or Costco may also be in the market to acquire an online EBT payment tool to save the time and cost of developing their own solution. All_ebt could also become a subsidiary of Propel, a venture-backed company developing software for managing government benefits. 

All_ebt has the potential to make life significantly easier for the tens of millions of food stamp recipients in the United States. While the company has yet to launch, it proposes a promising solution to food stamps’ incompatibility with online grocery shopping. That makes All_ebt a Deal to Watch.