The introduction of the payment card for asylum seekers has triggered an intense debate in Germany. The new system is intended to make the payment of social benefits under the Asylum Seekers Benefits Act more efficient and to prevent abuse. Instead of cash or vouchers, asylum seekers and AsylbLG recipients are now to receive credit on a specially equipped debit card with which they can make purchases.
The aim of the payment card is to reduce administrative costs, limit expenditure in order to ensure the purpose of the services, e.g. covering basic needs. However, the implementation and the restrictions associated with the payment card are controversially discussed.
While politicians emphasise the advantages of the payment card, such as curbing smuggling crime or simplifying administrative processing, many disadvantages are becoming clear at the same time. For example, the card can often only be used to a limited extent, which significantly limits the financial autonomy of those affected . In addition, the limited acceptance of shops and services leads to practical problems.
There is also criticism of possible data protection risks and the risk of stigmatisation of asylum seekers, as the card is easily recognisable to others as a symbol of their special status group. These areas of tension between efficiency, control and the preservation of human dignity make the payment card a highly topical and controversial topic.
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What is the payment card for asylum seekers?
After political discussions in 2023, the federal states and the federal government decided in November 2023 to introduce a payment card for asylum seekers.
With this payment card, the benefits to which they are entitled are no longer paid to asylum seekers in cash, or no longer in full, but are transferred to the payment card as credit. The payment card looks like a giro card, but it is not.
The payment card is a special debit card that is not accepted everywhere. Since the card is not connected to the Girocard payment system, the payment card can only be used to pay where this form of payment is accepted and appropriate readers are available. If a supermarket, retailer, swimming pool or other service provider where payment can be made does not offer this form of payment, refugees cannot pay there with the card.
Since merchants and service providers have to pay higher fees for this form of payment, many merchants and service providers do not accept the payment card. For asylum seekers, this means that they will not be able to pay everywhere with the payment card.
Payment card in the Asylum Seekers Benefits Act
The Asylum Seekers Benefits Act regulates the subsistence benefits that persons in the asylum procedure, with a temporary suspension of deportation or those obliged to leave the country receive as cash or non-cash benefits. Although the benefits under the AsylbLG are subsistence-secure, they are below the level of the citizen’s allowance (SGB II).
The legal basis for the use of the payment card was created in April 2024 in the Asylum Seekers Benefits Act (AsylbLG). The amendment to the law came into force on 16.05.2024. The payment card has been included as a further form of service and the range of applications has been expanded, so that refugees in shared accommodation can now also receive the payment card.
However, the payment card for asylum seekers is subordinate. Those who live in shared accommodation are to have their needs covered primarily by benefits in kind, those who live outside communal accommodation are to be covered primarily by cash benefits.
What are the advantages of the payment card?
Politicians see several advantages in the payment card for asylum seekers, which mainly concern efficiency, control and security. A central advantage would allegedly lie in administrative simplification. The cash payment of asylum seeker benefits or the issuance of vouchers for benefits in kind is associated with a high administrative burden for the authorities.
The introduction of the payment card is intended to digitize this process and thus save time and costs. The services are to be centrally managed and regularly loaded onto the cards without the need for time-consuming cash payments or manual billing.
Monitoring of services and combating migrant smuggling
Another advantage is the better control of the benefits paid out. With the payment card, spending can be made more transparent and, if necessary, limited to certain products or services.
This is to ensure that the services serve their actual purpose, namely to cover daily needs such as food or hygiene articles. This is to prevent the money from being paid to smugglers, for example, in order to illegally bring family members to Germany.
The introduction of the bank card thus also pursues migration policy goals in order to curb smuggling crime. Remittances to the country of origin are also no longer possible via this route, even if they are intended to support one’s own family. In addition, the payment card is intended to reduce the incentive for illegal migration, but this is doubted by experts.
Payment card to prevent cash theft
The security aspect also plays an important role. The payment card reduces the risk of theft or loss of cash, which is particularly important for asylum seekers in precarious situations. Unlike cash, the card can be blocked and replaced if lost, providing additional security.
Finally, the card is also seen as a modern and flexible system that can be adapted to the needs of beneficiaries and administrative requirements. From a political point of view, the payment card is therefore a progressive solution that is intended to optimize both the administration and the processing of social benefits.
How will the payment card work?
With the amendment to the Asylum Seekers’ Benefits Act (AsylbLG), the legislator has created the possibility of introducing the payment card as a form of benefit. However, the federal legislator has not made any concrete specifications as to how the card is regulated in detail and what functions the card should have. It is up to the federal states how they implement the payment card and what functions it is equipped with.
Some federal states, with the exception of Hamburg and Bavaria, have agreed that a large part of the benefits under the AsylbLG should only be booked on the payment card. Only a small part, usually a maximum of 50 euros per month and person for adults, is to be paid out to the asylum seekers as cash.
Transfers are not possible with the payment card, not even from one payment card to another. The payment card is to be valid nationwide, although the federal states can restrict the payment function regionally. This means that you can only pay with the card in a certain zip code area or only with the little cash you can withdraw. In addition, the payment card can be blocked for certain industries or goods (e.g. tobacco products, alcohol or gambling).
What are the disadvantages of the payment card?
The payment card and its planned design have met with fundamental criticism from many associations and refugee councils. On the one hand, there is already criticism that the issuance of the payment card with its restrictions represents unequal and disadvantageous treatment of the group of asylum seekers and other beneficiaries under the AsylbLG.
This is because one group of people is treated unequally compared to another group of people, namely those whose asylum procedure has already been positively concluded, without any objective reason. All the reasons cited by politicians, such as the curbing of illegal migration, the reduction of incentives to come to Germany, administrative simplification, the reduction of administrative burdens or cost savings, are mostly pretextual and are rightly doubted by experts.
Payment card not a primary form of service and administrative effort
In particular, the reduction of the administrative burden and the associated costs already seems questionable. As the first urgent decisions from Hamburg show, the blanket limitation of cash withdrawals to 50 euros per person per month is likely to be illegal. Rather, the authorities must examine the cash requirements of the individual beneficiaries individually.
In addition, it is doubtful for legal reasons alone whether a priority issuance of payment cards and thus a priority granting of benefits via payment cards is at all in accordance with the Asylum Seekers Benefits Act.
Even if, according to the provisions of the Asylum Seekers’ Benefits Act, the granting of benefits in cash and in kind were of equal rank to the form of payment card, the issuance and granting of benefits by means of payment cards would not be regarded as taking priority.
Even in the choice of the form of service, the authority would instead have to exercise its discretion in the individual case and decide for which persons the payment card should be used as a priority. However, this in turn would involve a not inconsiderable administrative burden, so that this reason for the introduction of the payment card should not exist either.
However, in the draft of the state government of North Rhine-Westphalia to amend the Implementation Act to the AsylbLG (NRW State Parliament, printed matter 18/10926) of October 2024, the payment card is determined as the primary form of benefit, which does not appear to be compatible with the AsylbLG in its current version.
Restriction of autonomy
The payment card restricts the financial autonomy of asylum seekers.
Since it is often limited to certain products and services, those affected cannot freely dispose of their money; this earmarking leaves no room for individual priorities or needs, which can be perceived as paternalism. Compared to other welfare recipients, asylum seekers thus have less freedom to manage their money themselves, which reinforces the feeling of unequal treatment.
Another disadvantage is the limited usability of the card. The acceptance points are often limited to certain shops that are connected to the system. This means that asylum seekers cannot shop everywhere, which can lead to limited choice and logistical challenges, especially in rural areas.
Online shopping or smaller providers also often do not accept the payment card. In some cases, even public facilities such as swimming pools or sales points for public transport tickets do not accept the bank card, which can also lead to organizational problems.
Practical-organizational problem of the payment card
The presumably illegal restriction of cash withdrawals makes the lives of asylum seekers more expensive and poses practical problems for them. Especially for people who live below the constitutionally required subsistence level, the purchase of second-hand goods is a way to save costs.
The purchase of used clothing, a bicycle or furniture is hardly possible if only 50 euros in cash per month are available. But it is also usually not possible to buy second-hand goods and clothing in social department stores or second-hand shops with the payment card, as these shops do not accept the payment card due to the additional costs, so that purchases can only be made with cash.
Further practical problems arise from the fact that transfers are usually not possible. Anyone who wants to conclude a mobile phone contract, the Deutschlandticket or other contracts cannot use such offers.
Even if meals at school or daycare or a class trip are to be paid for by bank transfer or other digital transmission channels for children, asylum seekers and AsylbLG recipients remain excluded. Even legal protection is made more difficult if asylum seekers and asylum seekers cannot even transfer the installments for their lawyer.
Privacy concerns
The payment card raises data protection concerns. Since the transactions are recorded digitally, the purchasing behavior of users could be monitored and evaluated. This can lead to a sense of control and surveillance. Even if data protection standards are met, mistrust of possible invasions of privacy remains. In addition, it should be technically possible for the authorities to monitor where asylum seekers and asylum seekers shop, what they spend money on or where they stay.
Even if so-called whitelists, i.e. individual activations for transfers by the authorities, were introduced, the authorities usually require justifications and personal data that is particularly worthy of protection in order to agree to the activation. However, there can be no talk of administrative simplification or cost savings here either.
Conclusion: Payment card for asylum seekers – The most important things summarized
- Objectives of the payment card: The payment card is to be introduced in order to make the payment of social benefits to asylum seekers more efficient, to reduce administrative costs and to prevent abuse, such as transfers to smugglers. The card is intended to limit access to services to necessary basic needs and reduce incentives for illegal migration.
- How the payment card works: Asylum seekers and beneficiaries under the AsylbLG receive a credit on a special debit card that is only accepted in shops and service providers that have set up an appropriate infrastructure. The card is not connected to the Girocard system and may be limited to certain shops and postcode areas. Cash withdrawals are often limited to small amounts, and transfers are usually not possible.
- Criticism of the limited usability: The card cannot be used in many shops, online shops and public services such as public transport or swimming pools, as these usually do not have the appropriate infrastructure or a transfer is usually not possible. This limited acceptance leads to logistical problems, especially in rural regions, and significantly limits the financial autonomy of asylum seekers.
- Data protection concerns: The digital recording of transactions carries the risk of monitoring and controlling the purchasing behaviour of asylum seekers. This leads to privacy concerns and reinforces feelings of distrust and privacy restrictions.
- Stigmatisation and social consequences: Since the payment card is easily recognisable as a symbol of asylum status, those affected can be stigmatised. This exclusion makes their integration more difficult and leads to them feeling disadvantaged compared to other welfare recipients.
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