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Small German town tests debit card for asylum-seekers

February 16, 2024

Asylum-seekers in Germany may soon receive their social benefits on a prepaid debit card rather than as cash payments to stop them from sending benefit money home. Some communities have already started the scheme.

Greiz, pittoresque town center
Greiz, a town of 22,000 inhabitants, is now giving refugees debit cards rather than cashImage: Ben Knight/DW

It has been two and a half months since the small, picturesque town of Greiz, Thuringia, became one of the first places in Germany to introduce the controversial "pay card" scheme for asylum-seekers — and, according to state administrator Martina Schweinsburg of the conservative Christian Democratic Union (CDU), it has been a success.

That's mainly because, Schweinsburg argues, it has eased a lot of tension in the small eastern German town.

The sight of non-Germans paying cash did not help ease tension in the community, she says.

"When they go into a supermarket and buy groceries for €20 and unroll a big pack of money to pull out a hundred-euro note, then it doesn't make a good impression," Schweinsburg told DW, sitting in her office. "I wanted to bring peace."

Martina Schweinsburg holding the debit card into the camera
Martina Schweinsburg says the new debit card has brought peace to GreizImage: Ben Knight/DW

If that is true, however, it is just a side effect. The point of the pay card initiative, some form of which is likely to be rolled out by state governments across Germany in the coming year, is to prevent state benefits from being sent outside the country to pay family or human traffickers abroad.

The city-state of Hamburg has become the first state to roll out the debit card, Bavaria has announced plans to forge ahead, and other German states are following suit.

Though there are various versions of the pay card under discussion, the model in Greiz is simple: Those seeking asylum will have most of their €496 ($533) in monthly benefits paid on a special chip card, while the rest — "pocket money" of around €100 (depending on the case) — is paid in cash.

Greiz has 730 asylum-seekers. At the moment, benefits for around 200 of them have been switched to use the card, the others are to follow suit by the beginning of March. 

Credit cards in a cash-friendly world

The card can be used in any store that accepts Mastercard credit card payments, but only those within the Greiz postcodes, and cannot be used for internet purchases. That's good for large supermarkets but not great for small grocery stores.

Entrance to a Middle-East food store in Greiz
Asian and Middle-Eastern food stores in Greiz need to get a card reader to keep their business afloatImage: Ben Knight/DW

Greiz, like Germany generally, is not particularly credit-card friendly — cafes and fast-food stands, for instance, are largely still cash only almost everywhere. None of the Asian and Middle-Eastern food stores that DW visited in the Greiz town center took card payments, though one Arab shop owner said he was planning to get a card reader just because of the new pay card.

"It's bad for me," Ibrahim (name changed) told DW. "I sell a lot of Arab products, and I've noticed that since the card was introduced, some people were only buying essential items, like bread. People aren't happy about it."

Schweinsburg says she has only heard one complaint herself: "One woman complained — she was from one of the Middle Eastern countries — that she can't pay off her debts at home anymore. And then my colleagues told her clearly that the money is there to finance a living in Germany and not for debts at home — she gulped, and accepted it."

The ultimate aim of the pay card, though rarely said out loud, is to help discourage immigration altogether — and there is some evidence that there has been an immediate effect on this front. According to Schweinsburg, 15 people, or three families, "from the former Yugoslavia," rejected the card and left the country immediately — "but when they go, they're just gone and they don't say why, so we can't prove it statistically that they left because of the pay card."

Easier payments

Though it has clearly come with some inconvenience for asylum-seekers, some of the volunteers who help them think it is, overall, a good thing. Volunteer workers that DW visited at a clothing bank for migrants described the scheme as "discriminatory," but they thought it also had its benefits — they said they had noticed it had helped families to budget their money better.

Volunteer workers in the clothing bank
Volunteer workers in a clothing bank for migrants described the scheme as 'discriminatory,' but also thought that it had its benefits Image: Ben Knight/DW

Town councilor Holger Steiniger of the socialist Left Party voted in favor of the scheme, even though his party is officially against pay cards at a national level. "They have some positive effects, and they outweigh the drawbacks," he told DW. "You just have to look at the mood in the population." What he means by "mood" has a lot to do with the fact that 29% of Greiz voters favored the anti-immigration Alternative for Germany (AfD) at the last federal election in 2021 — easily beating the Social Democrats, on 22%, into second place.

"With this pay card, I can disarm a lot of untruths and fake news," Steiniger told DW. "People can go shopping, but they can't withdraw cash, and they have no way of paying traffickers or whatever." That last point has become important to him, especially when talking to locals who are convinced that the money immediately gets sent abroad, though there is no clear evidence of this.

He also says the pay card system has removed a lot of bureaucratic and security issues for the local authority, mainly associated with making sure all the cash was available on the first of every month.

The only thing he criticizes is the postcode restriction, which, of course, heavily restricts freedom of movement for asylum-seekers. "This card has basically reintroduced the obligation to stay in one area," he said. "The shopping facilities in the Greiz area aren't exactly the best, that's a bit of a problem."

Holger Steiniger in his office
The Left Party's Holger Steiniger voted for the pay card, and says it has improved the mood in townImage: Ben Knight/DW

Human rights concerns

But others aren't so happy with the new measure, and the apparent enthusiasm for it sweeping through Germany's political ranks. Peter Lückmann, head of the refugee help organization Aufandhalt in the neighboring town of Gera, said that the asylum-seekers he has been helping are unhappy with the scheme but are reluctant to speak out.

"We can't find anyone who's had the courage to talk about it," Lückmann told DW. "Because what they say will certainly be critical, and they're simply afraid because if they're identifiable the authorities will have administrative tools to make their lives even harder."

What he's heard from the asylum-seekers is that the pay card is too restrictive. "If they could really use the card everywhere you could use a normal bank card — so you could buy a coffee or go to the hairdresser with it — then it would be worth a try," he said, adding that since it's effectively a credit card, it can't be used everywhere.

The bigger issue is that there's a good reason why asylum-seekers send money abroad. Lückmann said that a lot of the people he advises do indeed send money home — "Because their families actually depend on it to survive."

Edited by Rina Goldenberg

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Ben Knight Ben Knight is a journalist in Berlin who mainly writes about German politics.@BenWernerKnight