Status: 15.01.2024, 21:32 PM
By: Amy Walker
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In the future, asylum seekers will no longer receive cash, but a payment card. In some places, this is already being tested. One of the executing companies reports on the experience.
Berlin/Munich – For several months now, the introduction of a payment card for asylum seekers has been discussed again in Germany. At a federal-state summit in October, the state premiers agreed with Chancellor Olaf Scholz (SPD) to introduce the payment card nationwide and thus stop cash payments to asylum seekers. What exactly this will look like has not yet been determined. But something has been happening at the district and state level for some time. Pilot projects were launched in two districts in Thuringia in December, and in Hanover a few months earlier.
The company that takes care of the payment cards in the Thuringian district of Greiz is givve. In an interview with Ippen.Media, Managing Director Patrick Löffler and CMO and CSO Adrian von Nostitz reported on their experiences from the project so far. And about how they are now applying for a tender for the whole of Bavaria.
Payment cards for refugees: cash very popular in Germany
Mr. von Nostitz, you have been in charge of the pilot project in the Greiz district since the beginning of December. How has the feedback been so far?
Adrian von Nostitz: I'll be honest: Greiz was extremely ambitious right from the start. Within a few days, we had to start with the payment card. Now we are talking about the feedback with the district on an equal footing and are in a very sympathetic dialogue. So far, the county is pleased with how it has started. It also works in the administration and does not come to any complaints.
And how is it received by the refugees?
Adrian von Nostitz: Our payment card, which can be used to pay at almost all acceptance points, is close to cash. This is also positive for the asylum seekers. In addition, the card simplifies the effort for everyone involved – including the refugees, who no longer have to appear at the authority on a certain day at a certain time, possibly with small children.
Patrick Löffler: In the beginning, when we founded givve in 2010 as a provider of such payment cards, I thought somewhat naively that we would simply buy plastic cards and then resell them. But it's much more complex than that (laughs). We had to deal with a wide variety of topics: talks with Mastercard, with BaFin [editor's note: Federal Financial Supervisory Authority], with the authorities. We also had to raise awareness among retailers. And all this with a team of 50 people. But it is extremely important to me that we now use this long-standing and extensive expertise in the introduction of payment cards for service recipients – because once these payment cards have fallen into disrepute for this purpose, then an entire industry suffers.
There have already been attempts to introduce such a card for migrants in Germany. Wirecard, among others, was involved at the time...
Löffler: Oh yes, we also had our cards at Wirecard at the time! It was so blatant, an unbelievable stress test. When Wirecard went bankrupt, we had 70 million euros of customers on our cards. And not a single euro has been lost. This is because the money is neither with us nor with the card service provider - at that time Wirecard - but in a so-called segregated account, i.e. a separate account.
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from Nostitz: We can use this experience to our advantage today. Because there is no other company in Germany that can provide this proof: We have passed the biggest stress test.
Patrick Löffler (left) and Adrian von Nostitz © givve
Why do you want to supervise such a project? You say yourself that you risk a lot if the payment card were to fall into disrepute.
Löffler: We want to digitize cash because it would make so many things so much easier and could change things for the better. Just the effort that the administrations have at the moment is that they have to contact all asylum seekers, who then have to come to the office and pick up their money at the cash desk. And there are also security concerns for refugees: If everyone knows that this person will leave office on that day and has 400 euros in his pocket, then this can be dangerous under certain circumstances. All this disappears with the payment card.
von Nostitz: Exactly, for the administration, charging and unloading can be done at the touch of a button, very uncomplicated. In Greiz, it was decided that part of the money that the asylum seekers receive will be loaded onto the card, while part will still be picked up on the spot. But that could change again in the future. This was the case with our parent company in France: since 2016, payment cards for migrants have been introduced there and in 2020 cash was completely abolished. Also because contactless payment is now possible almost everywhere.
But France is not Germany. We are a cash country, paying by card is not possible everywhere.
von Nostitz: That's right, even if Corona has meant that it's possible to do it much more often here. But an asylum seeker also needs cash, this is important to stress. Our solution doesn't mean that they won't get it anymore – just that the administration won't have to spend it anymore.
So asylum seekers can also withdraw money with their payment card?
von Nostitz: Yes, but not at an ATM, but only when shopping at the supermarket checkout. Because we want to make sure that the card always remains free of charge. And you're probably familiar with this yourself: In Germany, fees are often charged at vending machines. These are things that we cannot influence, so we would have to talk and negotiate with the operators of all ATMs. That's why this is not possible with our card.
Löffler: Yes, that's a very important point. There are always attempts to charge fees at various points. However, it is important to us that the product works for customers – which is why our card must always remain free of charge. We want to be able to guarantee that.
In Greiz, they have also decided on another restriction: The card can only be used within the district. What is the background to this?
von Nostiz: They decided to do this because they wanted to strengthen the business location. In other words, the money that is made available to the refugees is to be put back into circulation locally. With our cards, you can set this up – or in another way, for example, so that the payment card works throughout the state or throughout Germany. Technically, this is also possible with our cards.
The German government wants to introduce a payment card for the whole of Germany. At the same time, some federal states and districts - such as Bavaria or the district of Greiz - are already pushing ahead. Could it lead to problems later on?
from Nostitz: Bavaria has said from the outset that it wants its own solution, independent of the federal level. My wish would be that, in the end, only minimum standards would be specified at the federal level, so that competition between the providers can then arise at the regional level....
Löffler: ... which would only make the industry better!
from Nostitz: But it doesn't look like that at the moment. Presumably, the federal government wants to issue a tender for the whole of Germany - that is, a company for the whole of Germany would be sought. I don't think that's a good thing, such a monopoly carries dangers.
Löffler: There are now also free riders, companies that have now been founded from scratch and may be politically well connected - but have never sold a payment card. That's always the case when there's suddenly money to be made in a new area. Therein lies a danger. We, on the other hand, have been offering payment cards since 2010. There are two or three other competitors that I trust to do that – and I hope one of us will be selected in the end.