Sola is positioning itself to capture market share by enabling software partners to process chip-enabled Electronic Benefit Transfer (EBT) cards. As state governments transition to more secure hardware to combat fraud, the Brooklyn-based payments platform is offering early technical support. This move targets grocery software providers who must update their systems to accommodate new card technologies before state-mandated rollouts begin.
Sola Payment Engine EBT Chip Integration
The company is expanding its existing magstripe EBT capabilities by introducing chip support through the latest version of its Payment Engine. This software layer connects partner applications with supported hardware, specifically targeting integrated software partners using eligible configurations and Verifone Engage devices. While existing magstripe transactions will continue to process, partners must update their integrations and receipt formats to facilitate chip acceptance. Sola is also planning to extend this capability to its proprietary Sola Terminal application by the end of 2026. This rollout aims to address the security needs of merchants as states move away from less secure magnetic stripe technology to prevent skimming and benefit theft.
State Transitions and Market Readiness
The timing of this update aligns with significant state-level shifts in EBT infrastructure. For instance, New York is planning to issue approximately 2 million chip-enabled EBT cards starting in early 2027, with officials encouraging retailers to modernize equipment in advance. Sola is leveraging this regulatory and technological shift to provide an advantage to its partners. By offering chip support while market availability remains limited, the company seeks to deepen its relationships with software partners. Sola currently manages over $20 billion in annual payment volume and supports more than 30,000 merchants through its PayFac-as-a-Service model, backed by PSG Equity.
Key Takeaways
- Sola is introducing chip-enabled EBT support via its Payment Engine and Verifone Engage devices.
- New York plans to issue approximately 2 million chip-enabled EBT cards beginning in early 2027.
- Full support for Sola’s proprietary Sola Terminal application is expected by the end of 2026.
FinanceInsyte's Take
In our view, Sola is executing a targeted defensive play to secure its position within the grocery fintech ecosystem. By addressing the chip transition ahead of major state rollouts like New York's, Sola is attempting to lock in software partners before competitors can standardize their own chip-enabled EBT offerings. This strategy highlights the critical importance of hardware-software synchronization in the payments industry. For institutional investors, Sola's ability to navigate these localized, state-driven regulatory shifts will be a key indicator of its long-term scalability.
Questions & Answers
How does Sola's update impact existing magstripe EBT transactions?
Existing magstripe transactions will continue to be processed, but software partners must update their specific integrations and receipt formats to support the new chip acceptance capabilities.
What hardware is required for the initial chip-enabled EBT rollout?
The capability is initially available for integrated software partners utilizing eligible configurations and supported Verifone Engage devices.
When will Sola's proprietary terminal application support chip-enabled EBT?
Sola expects to provide support through its proprietary Sola Terminal application by the end of 2026.
What is the primary driver behind the transition to chip-enabled EBT cards?
The transition is driven by the need to enhance transaction security and protect cardholders from skimming, fraud, and benefit theft as states modernize their systems.
Source: Businesswire
