JPMorgan Chase adds to its revenue stream every time an American signs up for food stamps in 23 states
The same corporation that received tens of billions of taxpayer dollars back in 2008 as part of the massive corporate bailout swindle is now reaping hundreds of millions of dollars every year from the federal food stamp program, according to little-known reports. For every American that signs up for the Supplemental Nutrition Assistance Program (SNAP) in 23 states, it turns out, JPMorgan Chase & Co. earns a processing fee of between 31 cents and $2.30 per month, which adds up to nearly $1 billion a year in additional revenues for the company.
Much of the younger generation might not realize it, but the federal food stamp program used to be just that — a system serviced by actual paper food stamps. Today, however, the system is run by an electronic card system known as Electronic Benefits Transfer (EBT), for which plastic cards are issued to recipients. These cards work much like credit or debit cards, and can easily be swiped discreetly at grocery and convenience stores for food purchases. And rather than have to be continually reissued like stamps, EBT cards are simply recharged every month with more money.
But with this advanced technology comes the need for residual processing, and this is where JPMorgan comes into the picture. According to MoneyMorning.com, 23 states currently contract out with JPMorgan to handle the processing responsibilities associated with EBT management. And for each person receiving food stamp benefits, JPMorgan is able to add a monthly sum to its revenue stream which, when compiled across the board, appears to add up to nearly $1 billion annually.
Based on the latest available figures, JPMorgan appears to have raked in roughly $100 million in revenues, on average, from each of the states with which it contracts throughout the past seven years. This adds up to at least $2.3 billion in total revenues during this same time period, although the precise figure cannot be confirmed. Even so, JPMorgan is clearly garnering a pretty penny off the backs of both taxpayers and the nation’s poorest individuals through its EBT contracts.
“This business is a very important business to JPMorgan,” said Christopher Paton, the Managing Director of JPMorgan’s public-sector payments business, to Bloomberg News back in 2010 about its federal food stamp revenue stream. “It’s an important business in terms of its size and scale … Right now, volumes have gone through the roof in the past couple of years.”
JPMorgan also collects fees directly from food stamp recipients
EBT processing fees are not the only source of food stamp revenue for JPMorgan, however. According to MoneyMorning.com, the corporate giant also charges individual states a monthly point-of-sale (POS) machine fee, and SNAP recipients who use their EBT cards at ATMs outside of the JPMorgan network are also charged additional user fees. JPMorgan also charges EPT users fees to replace lost cards, and even charges a 25-cent fee for customer service calls.
“All those charges and fees come directly out of the pocket[s] of SNAP recipients — people so poor they need food stamps to make ends meet,” writes David Zeiler, Associate Editor of MoneyMorning.com. “You’d think a bank that needed a $94.7 billion bailout from U.S. taxpayers as a result of the 2008 financial crisis would have a better sense of civic responsibility. But that’s just not in JPMorgan’s DNA.”
According to Carnegie, the number of food stamp recipients in the last three years increased by over 15 million and now represents well over 10% of US households. “More and more people are becoming comfortable with food stamps, and soon I think the public will be willing to give up cash in favor of the EBT card,” she said. “This is the change we’ve been waiting for.”The change is obvious: once relegated to the poor and stigmatized, the Food Stamp is not just becoming more accepted, it is looking very lucrative for many US businesses struggling with a slow recovery and a large pool of potential customers sidelined from the market by unemployment.
“Everyone knows that food stamps stimulate the economy by putting purchasing power back in the hands of the unemployed, but the really great thing about them is that you don’t even have to be unemployed to get them,” Carnegie said. “Plus, they are not regulated in the same manner as the US dollar is, and so this gives the President more flexibility to increase the supply.”Carnegie added that this flexibility also allows the White House to redirect funds more equitably than private bank accounts and personal finances. She envisions a time when every U.S. citizens will only need one EBT card instead of multiple accounts.
“The credit card will soon also go the way of the dollar,” Carnegie noted. “Poor citizens notoriously have difficulty getting credit or managing their debt. But the EBT program allows the government to assist them in managing their finances so that they will always have enough to eat.”
Some speculate that the EBT card must also include specifications for purchases, such as quotas of certain products that must be acquired. This will help poor families, who typically have dietary management issues, to make good food choices.
“The EBT will set a ‘budget’ for a family, telling them what kinds of groceries to buy,” said Carnegie. “You may see a time when the EBT will have an associated app for your government-issued phone to guide you to the nearest store, or to the one with the shortest lines. There’s no end to the possibilities.”
Will the dollar be missed? Many American businesses seem to be pragmatic enough to overcome their sentimental attachment to the dollar in favor of something more profitable.
“Our nation is moving in a new direction and there’s no way back,” Carnegie said. “Big corporations understand that and are willing to assist the government by providing the technological know-how to make this work.”
“Corporate executives want to get in on the top floor of this program to lock in their positions. It is going to happen, and now is the time to act,” she added optimistically.