Transacting with Tokens? Nutrition Assistance Programs Try Out a New Tactic With Unexpected Success

Transacting with Tokens? Nutrition Assistance Programs Try Out a New Tactic With Unexpected Success

Transacting with Tokens? Nutrition Assistance Programs Try Out a New Tactic With Unexpected Success

Ryan Gutowski

Ryan Gutowski

Husband, Father, "YouTube Educated" Gardener. He's a passionate advocate for community gardens. In 2015 he planted a community garden that continues to provide fresh produce and a communal space for his neighbors.

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Payment technology is marching forward and it's becoming more common to pay for goods using an app, tap or scan of a fingerprint.

While it may seem like a step backward, certain merchants are finding better redemption and higher spending by using an unlikely 'form factor:' wooden tokens. And farmers markets across the nation are leading the charge.

In most cities around the United States, chances are that you can find a local farmer's market that offers fresh food options from around the area. Whether indoors or under a tent, farmers markets can be a hub for social and economic activity.

The current landscape

But to really understand the trend toward tokens (no, not that tokenization), consider the landscape. Over the past couple years. the term 'food deserts' (a term for urban areas where it's difficult to buy affordable or good-quality food) has become part of the modern vernacular. There might be a fast-food restaurant on every corner, but relying on $2 burgers and tacos has questionable (and even downright harmful) repercussions to our social and physical health.

In some of the least-advantaged communities, healthy food options may seem economically out of reach. That's why in 2009, Wholesome Wave Georgia put a plan in place to give impoverished communities more incentive to choose fresh foods. The "Georgia Fresh for Less" program doubles Supplemental Nutrition Assistance Program (SNAP) or electronic benefit transfer (EBT) dollars for the purchase of fresh foods in local farmers markets.

Transacting with… tokens?

In each of the program's 67 locations, farmers market staff will swipe shoppers' EBT cards. But that's where the similarities to the grocery store end. Shoppers then receive tokens that are worth double what has been debited from their card. They can use all their tokens that day or save them for a future trip to the market. A survey from Wholesome Wave Georgia reported that 78 percent of participants surveyed in 2017 increased their produce consumption.

But why the increase? It's all about maximizing value. The shopper can choose to pay full price by using their funds at a grocery or convenience store. But if they chose to use their EBT card at a farmers market, their spending power doubles. This is not only giving the consumer more bang for their buck, but it's also encouraging people to participate in their local economy.

A survey from Wholesome Wave Georgia reported that 78 percent of participants surveyed in 2017 increased their produce consumption. (Source: 2017 Wholesome Wave Georgia Annual Report)

In 2017, nearly 90 percent of program participants reported an increase in farmers market visits since starting the "Georgia Fresh for Less" program. Wholesome Wave Georgia estimates that for every $100 spent at a local farmers market, $62 of that number stays in the local economy and $99 of it stays in the state economy.

This idea isn't unique to just the state of Georgia. Wholesome Wave launched the 'doubling' program first in 2008 in San Diego, Boston, New York and Massachusetts. This initiative is now present across much of the United States, with some states having a larger presence than others.

The payments perspective

So what can we learn from this as payments professionals? There's a lot of talk about slower-than-expected adoption of mobile payments, biometrics and other technologies that will replace plastic cards and checks. We all wonder what will it take to reach the tipping point where these 'alternative payments' become the default choice.

The Wholesome Wave example demonstrates that in order to influence behavior, the technology matters less than the incentive.

Put another way, whether it's a wooden token or a retina scan, the most viable and widely-adopted solutions will sweeten the deal for users with additional loyalty points, discounts and promotional offers that incent behaviors. This is above and beyond guaranteeing convenience and security — mere table stakes in the payments world today.

We've all seen brand-new payments innovations come to market with breathless hype and then fade away after being dismissed as a solution looking for a problem. However, as long as there's a tangible benefit to adopting a new technology, consumers will change their behavior in order to recognize greater value — whether that's a tokenized mobile transaction or a humble wooden token.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Ryan

Ryan Gutowski

Husband, Father, "YouTube Educated" Gardener. He's a passionate advocate for community gardens. In 2015 he planted a community garden that continues to provide fresh produce and a communal space for his neighbors. Since 2013 he has worked on the digital creation and weekly publication of ngenuity. He is always on the lookout for interesting payment trends that impact our communities. Ryan works on digital content creation, collection of analytics data and development across multiple TSYS properties online.

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