Walmart and Amazon will now compete on an entirely new battleground as low-income shoppers get access to spend food stamps online

AP/Joe Nicholson

Amazon is now accepting SNAP benefits in New York.

• Amazon and Walmart are now accepting Supplemental Nutritional Assistance Program (SNAP) benefits for groceries that are purchased online.
• Amazon is also waiving Prime membership fees for families that qualify for SNAP benefits.
• It's estimated that roughly 18% of all SNAP benefits are spent at Walmart, or roughly $13 billion annually.

Amazon and Walmart are now accepting Supplemental Nutritional Assistance Program (SNAP) benefits for groceries that are purchased online as part of a pilot program in New York, the companies said Thursday.

Amazon said it also will waive Prime membership fees for families that qualify for SNAP benefits, as part of the program.

SNAP benefits, also known as food stamps, help low-income families pay for food. The federally-funded program loads monthly benefits onto Electronic Benefits Transfer cards, which act as debit cards at grocery stores.

By accepting SNAP benefits online, Amazon now has the opportunity to access a new set of customers and potentially eat into Walmart's share of food-stamp spending.

It's estimated that roughly 18% of all SNAP benefits are spent at Walmart, or roughly $13 billion annually.

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"This new initiative helps us increase access for millions of low-income New Yorkers by adding a new SNAP redemption option, with broad selection, low prices, and the convenience of home delivery," Amazon said in a news release.

If the program is successful, it could be rolled out nationally.

"The ultimate goal of this pilot is to pave the way for a national rollout once the USDA identifies the best path to large-scale implementation," Amazon said.

The pilot program is being implemented in partnership with the US Department of Agriculture.

ShopRite will join Walmart and Amazon next week in accepting SNAP benefits online, with more retailers to follow, the USDA said.

"People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food - by ordering and paying for groceries online," USDA Secretary Sonny Perdue said in a statement. "We look forward to monitoring how these pilots increase food access and customer service to those we serve, specifically those who may experience challenges in visiting brick and mortar stores."

The pilot will eventually expand to Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington, the USDA said. The SNAP benefits won't cover the cost of delivery or other service charges.

Walmart has nearly 300 grocery pickup locations in the states that will be part of the pilot program, a spokeswoman said.

"We are excited to be part of the USDA's pilot program and to be able to make our Grocery Pickup and Delivery service available to more and more people, regardless of their payment method," a Walmart spokeswoman said. "This pilot program is a great step forward and we are eager to expand this to customers in other states where we already have a great online grocery business."