Amazon to begin accepting food stamps for USDA pilot program

Jan. 17 (UPI) -- This summer, Amazon.com will begin accepting food stamps for online grocery orders to help the U.S. Department of Agriculture launch a pilot program aimed at making fresh food more available to low-income Americans in rural areas.

The planned two-year USDA Supplemental Nutrition Assistance Program (SNAP) online program will feature Amazon as one of seven online grocers to test the project -- specifically regarding web ordering and online payments.

"Amazon is excited to participate in the USDA SNAP online purchasing pilot," the Washington-based company said in a statement to CBS MoneyWatch. "We are committed to making food accessible through online grocery shopping, offering all customers the lowest prices possible."

Amazon first branched out into the grocery market a decade ago but has never before catered to the low-income demographic. Its move to accept electronic benefit transfer (EBT) government assistance is expected by analysts to have an impact on Walmart, which has long been a major player in that corner of the market. The Arkansas-based super chain, though, is not presently set to be part of the USDA's program.

"We look forward to working with [USDA] as they continue to explore this opportunity," Walmart said. "We've expanded our highly popular online grocery service from 5 markets to more than 100 markets over the past 18 months."

The Agriculture Department has previously flirted with similar ideas, but one stumbling block has always been customers' inability to pay for groceries online with food stamps. That will change when the new program launches this summer.

National grocers set to participate are FreshDirect (New York), Safeway (Maryland, Oregon, Washington), ShopRite (Maryland, New Jersey, Pennsylvania), and Hy-Vee (Iowa). Two local companies, Hart's Local Grocers and Dash's Market, both in New York, are also involved in the project.

The online pilot program represents Amazon's latest effort to become a larger presence in the online grocery market. Last month, it introduced Amazon Go, an application-based service that enables shoppers to buy food on their smartphones and pick it up in-store without the checkout process.

Amazon expects Go stores to open sometime early this year.