Symbolic policy or sensible measure
Why is a payment card to be introduced?
In November 2023, the federal and state governments decided to introduce a so-called payment card. Refugees will no longer receive some of the state benefits under the Asylum Seekers Benefits Act in cash, but via the payment card. This is to prevent refugees who are going through the asylum process or who are tolerated from transferring money from social benefits to their home countries. The aim is also to reduce the financing of people smuggling. The municipalities also hope to ease the administrative burden.
How does the payment card work?
At the end of January 2024, a working group of federal and state representatives presented a joint roadmap and minimum technical standards for the introduction of the payment card. The plan is to have a credit-based card with a debit function that is not tied to a bank account.
The card can only be used in Germany and will be accepted in all shops for everyday needs. It will not be possible to transfer money to other accounts in the country or abroad. The federal states will decide how much money is transferred to the card, the maximum amount that can be withdrawn and any additional functions or restrictions that the card has. These include, for example, purchases from certain categories of retailers and specified postcode areas.
What is the criticism?
Social organizations such as ProAsyl criticize the introduction of the payment card as a “populistically charged sham debate”. The introduction will not solve any real problems. It creates a “discriminatory instrument” for refugees. Caritas spoke of a “costly” and “ineffective” measure.
Researchers also point out that there is no evidence that the introduction of a payment card leads to a decrease in “irregular migration”. Furthermore, there is no data to prove that large amounts of social benefits are sent back to the home countries. The federal government has also stated that it has no reliable figures on this.
The German Association of Towns and Municipalities also warns of a patchwork of different regulations and high costs if federal states choose different paths when introducing the payment card. For example, North Rhine-Westphalia is leaving it up to local authorities to decide whether to introduce the payment card. Nor is there any provision for the state to cover the costs.
How are the first tests going?
The first test phases with payment cards have been in place since fall 2023. The Ortenau district in Baden-Württemberg and Greiz in Thuringia launched a pilot project at the end of 2023. Since fall 2023, Hannover has been the first major city to test the “Social Card” payment card.
In Hannover, the city books the full benefit entitlement onto the payment card. Beneficiaries can freely dispose of the credit. The card can be used in all stores that accept a Visa card. The design of the “Social Card” resembles familiar cards to avoid stigmatization.
Initial results paint a positive picture: acceptance among the population and refugees is high. The card is being handed out smoothly thanks to multilingual information sheets. Cities and municipalities are also reporting a reduced administrative burden.
What happens next?
At the federal level, a legal safeguard is currently being discussed in the Asylum Seekers Benefits Act. The FDP argues that refugees residing outside of reception centers cannot receive a payment card. The SPD has confirmed that the federal government has promised to make the necessary legal changes. The Greens, on the other hand, have stated that the current rules also apply to these groups of people. An adjustment of the law is not necessary. Criticism has also come from the CDU/CSU, who accuse the Greens of blocking the introduction of the payment card.
Regardless of this discussion, 14 of 16 federal states have launched a joint tender for the payment card. The process is expected to be completed by the summer. The nationwide introduction is scheduled for the fall. Bavaria and Mecklenburg-Western Pomerania, on the other hand, are using their own procurement procedures. Bavaria has also announced that its payment card should not be used for online shopping or gambling. A restriction of use to certain regions is also being discussed. Since February 15, Hamburg has been the first federal state to introduce the payment card nationwide.
Editor