UPDATE 1-Instacart, Shipt plan new payment methods for low-income U.S. shoppers

(Adds details on Walmart and Shipt executive quotes)

By Arriana McLymore

NEW YORK, NY, Sept 28 (Reuters) - Grocery delivery services Instacart and Target Corp's Shipt said on Wednesday they will expand their payment methods for low-income U.S. shoppers in line with the White House's efforts to ramp up healthy eating and curtail diet-related diseases.

President Joe Biden on Tuesday announced plans to end hunger in the country and increase healthy eating initiatives by 2030. As part of the initiative, the Biden administration wants to update regulations that allow online shopping with programs such as food stamps, Temporary Assistance for Needy Families(TANF) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).

Instacart, which has allowed food stamps or Supplemental Nutrition Assistance Program (SNAP) electronic benefits transfer (EBT) card purchases for the last two years for certain grocers, said in a statement that it plans to include TANF next year, and is also pushing to offer food stamp payments to all grocery partners.

More than 21.4 million U.S. households use food stamps, with nearly 3 million of the families ordering their groceries online, according to the U.S. Department of Agriculture. Food stamps restrict shoppers to nonalcoholic beverages, cold food items, seeds and plants.

Expanding payment options for low-income shoppers could help the delivery platforms lure low-income grocery shoppers away from Walmart.com and Amazon.com, which also have food stamp payment options.

More than 783,000 homes receive TANF cash benefits, which help families purchase toiletries and other essential items.

Instacart's TANF addition will cover non-grocery items and service and delivery fees, which are not covered by SNAP EBT benefits. The company previously waived its $3.99 delivery fees for food stamp purchases.

Shipt shoppers will also be able to pay for orders with SNAP EBT in 2023. The delivery company currently powers grocery retailer Meijer's website and allows food stamp payments through that platform. Target.com customers can make grocery purchases online with SNAP EBT and their deliveries are powered by Shipt.

Shipt Chief Executive Kamau Witherspoon told Reuters that the delivery service is aiming to launch its expanded programs in early 2023.

"To make an impact on food security here in the U.S., it truly is an all-hands-on-deck type of problem," Witherspoon said. "From local government to federal government, public sector and private sector, it's going to take all of us to come together to solve this issue."

Shipt does not currently offer any WIC or TANF payment options. Instacart does not currently offer WIC payments. Walmart, the largest U.S. retailer, is participating in a WIC online pilot program through the USDA; however, the company did not announce any expansions to its current offerings for low-income shoppers on Wednesday.

Amazon provides discounted Prime memberships of $6.99 per month to subscribers participating in government assistance programs. However, the subscriptions cannot be paid for directly with the benefits. Amazon Prime membership is usually $14.99 per month.

SNAP EBT Amazon shoppers also receive additional discounts of up to 15% off on select meat, produce and toiletries purchased at Amazon Fresh and Whole Foods.

Amazon did not immediately respond to requests for comment on whether the companies have any announcements related to the White House health initiatives. (Reporting by Arriana McLymore; Editing by Sherry Jacob-Phillips and Jonathan Oatis)