It has long been called for, now it is about to arrive all over the country: The payment card for asylum seekers is expected to be rolled out in all of Germany's 16 federal states shortly.

The news comes on the heels of delays due to legal disputes and other complications. In the city state of Hamburg, which started to issue payment cards in February already, a court in July for instance ruled that rigid cash limits on payment cards for refugees do not adequately meet the needs of groups like pregnant women and families with young children.

InfoMigrants answers the most important questions about the nationwide launch of the card:

How do the payment cards work?

Payment cards (Bezahlkarten in German) look like debit/credit cards on which most (but not all) of their state benefits are booked once a month.

Asylum seekers don't have residency status in Germany and thus cannot have their own bank account nor work legally for at least the first months in the country.

Local authorities have hitherto paid asylum seekers a monthly state benefit of around 400-500 euros -- either in cash or in vouchers.

Asylum seekers can use the Bezahlkarte in any shop where normal credit cards are accepted, which in Germany excludes many small shops. They may however be restricted to certain postcodes. What's more, they cannot be used to make online payments.

In June, the leaders of Germany's 16 states agreed to limit cash payments to asylum seekers to 50 euros per month, although three states said the amount was problematic.

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What benefits do refugees receive?

In the first few months after arriving in Germany, asylum seekers are entitled to "basic benefits". These are intended to cover accommodation, food, clothing and other "necessary needs". To pay for these things, asylum seekers and migrants with refugee status generally receive benefits in kind in the initial reception centers in the federal states.

In addition, the basic benefits are intended to cover the "necessary personal needs" of daily life. These are primarily covered by benefits in kind, too; however, vouchers, cash benefits and -- since the Asylum Seekers Benefits Act was updated in May -- and payment cards are also possible.

If asylum seekers receive their "personal needs" in full, this amounts to 204 euros for single people. If they move out of their reception centers, cash benefits are primarily provided for both necessary and personal needs. Single persons and couples receive 460 and 736 euros, respectively, for both necessary and personal needs.

Why was the card proposed?

The introduction of the payment card for asylum seekers and refugees was advocated by the conservative CDU/CSU faction, the liberal FDP, as well as the federal states, as an alternative to cash benefits.

The payment cards are designed to prevent money transfers abroad and and to deter payments to criminal traffickers. Additionally, it seeks to simplify the distribution of benefits and alleviate the administrative burden on local authorities.

Why is the introduction of the payment card taking so long?

After the conference of state premiers decided to introduce the payment card last November, the Parliament (Bundestag) and its upper house (Bundesrat) gave the green light this April.

Due to legal disputes, however, the introduction of the project of the 14 federal states came to a standstill: a company that had lost the award procedure lodged an appeal with a regional court in August. A month later, the court nevertheless approved the award of the contract to a competitor -- a cooperation between several companies such as Secupay and Publk under the name SocialCard.

When will the nationwide card arrive?

"We are currently coordinating the rollout of the SocialCard together with the 14 federal states," Publk CEO Joerg Schwitalla told the AFP news agency. Bavaria and Hamburg already completed the rollout, although Hamburg wants to reportedly switch to the nationwide payment card as soon as it is available.

The cards are currently being configured individually and training courses are being held for employees in the authorities, AFP reported. "However, each federal state decides for itself when and in what form the cards are issued," Schwitalla said.

According to AFP, the state of Brandenburg last week announced it had completed its preparations. In Schleswig-Holstein and Baden-Württemberg, the card is reportedly to be introduced in December.

Which states already have a payment card?

Hanover was one of the first municipalities in Germany to introduce Publk's SocialCard in December 2023. However, this is not only aimed at refugees, but also people who receive social welfare but do not have their own bank account, according to AFP. The card in Hanover has no cash restriction.

As mentioned before, Hamburg followed suit as the first federal state, followed by Bavaria at the end of June. Some districts in Brandenburg, Saxony and Thuringia, among others, already have their own cards in circulation. According to AFP, the number of districts that have already introduced their own cards is unknown.

Are there any downsides to the card?

Migrant advocacy groups and experts criticize the cards as discriminatory, particularly in a country that remains heavily cash-based.

The non-profit Society for Civil Rights (GFF), for instance, claims that the restrictions of the card will push people below the poverty line. "With the payment card, daily needs that form part of the minimum subsistence level can no longer be covered or can only be covered at higher prices," GFF writes on its website.

Herbert Brücker, a senior researcher at the Institute for Employment Research, anticipates the system to result in indirect costs. "The payment card restricts mobility and therefore also integration: Job hunting would be more difficult, asylum seekers would be cut off from certain goods and services," he told tagesschau.de in April.

Moreover, the limits the payment card will entail were the subject of several court rulings over the past few months: In August, for example, a Bavarian court ordered alternative methods of paying the monthly allowance to two asylum seekers, arguing that the payment cards were too restrictive for their needs.

Read Also'People look at you funny' – asylum seeker payment cards in Germany come with restrictions, stigma

with AFP