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Germany to Deliver Benefits Via Payment Cards Rather Than Cash

Germany, disbursements

The German parliament approved legislation Friday (April 12) that calls for benefits to be delivered to asylum seekers on payment cards rather than cash. 

This change is meant to limit how these migrants can use the benefits, AP reported Friday.

The payment cards will only be able to be used for payments in local shops and services and to withdraw limited amounts of cash, according to the report.

The cards will not be able to be used to transfer money outside of Germany, a limitation that is meant to prevent migrants from sending money to people abroad or to smugglers, the report said.

The legislation also allows local authorities to make exemptions and to choose how much cash asylum-seekers can withdraw, per the report.

The number of people applying for asylum in Germany rose to 350,000 in 2023, a figure that was 50% higher than the year before, according to the report.

In other recent news around government benefit payments, PYMNTS reported in January that aggregators are competing to unlock the spending opportunities presented by a range of benefits programs.

For example, Instacart announced at that time that it expanded its acceptance of Supplemental Nutrition Assistance Program (SNAP) Electronic Benefits Transfer (EBT) payments to reach 96% of households enrolled in the program.

That move came as aggregators compete to both win the spending of SNAP recipients and drive overall eGrocery penetration with lower-income consumers. In September, for instance, Uber announced plans for Uber Eats to accept SNAP EBT payments. Plus, during the summer, DoorDash shared that it was adding the option for consumers to make purchases with these benefits. 

When it comes to distributing government disbursements, PYMNTS Intelligence has found that since the beginning of the pandemic, both individuals and businesses have had rising expectations for low-friction and instant payments.

This interest in instant payments is particularly high among millennials and bridge millennials, and while interest is highest for free instant disbursements, many consumers would even be willing to pay to have funds deposited more quickly, according to “Innovating the Future of Government Disbursements,” a PYMNTS Intelligence and Ingo Money collaboration.