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How FinTech is benefiting the European immigration crisis

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The immigration crisis continues to roll on across Europe and even the most compassionate amongst us could be forgiven for focussing on the sheer statistics of the situation and overlooking the humanitarian issues. The speed at which the crisis unravelled means many governments were ill-prepared and are now looking for effective means to solve a number of operational and logistical challenges.

One of their key areas of focus is the efficient distribution and monitoring of funds to asylum seekers and refugees. Cash is the default method used in most countries but it has significant limitations:

●      governments are not able to determine whether funds are being distributed to claimants fairly

●      they have no method of monitoring, reporting or auditing these payments

●      the cash must be transported to immigration centres and safeguarded once on site

Similarly receiving cash is not ideal for the individual claimant either. Cash leaves this group:

●      vulnerable to theft, as asylum seekers are unlikely to have bank accounts or anywhere safe to store cash

●      unable to set up any regular payments such as Direct Debits, make contactless or online payments which can mean they pay over the odds for items, which further perpetuates the feeling of financial exclusion

●      with a decreased ability to take financial responsibility, as living on cash is much more hand to mouth than having the capability to budget ahead

Prepaid as an alternative to cash

The more prudent governments across the EU are considering the use of prepaid cards as an alternative solution to cash payments - with some having already adopted this technology. The main appeal is that the issuing government can not only monitor claimant’s spend in real time and make top up payments at the click of a button but as the card can be used across the entire SEPA region, the individual’s movements can also be tracked: it is has been widely acknowledged that many countries have simply lost track of many immigrants. The administration of these asylum seeker payments is also greatly reduced by using prepaid technology and allows for better control over budgets. Where necessary, spend can be blocked right down to the retailer/MCC and instant fraud alerts can be implemented to minimise risk. The very nature of FinTech is that it is agile and can be tailored to meet the exacting requirements of each government.

An interesting aside to this desire to track migrants is that Brussels is launching legal action against a group of countries who are not adequately capturing data (such as fingerprints) from new arrivals within a specific time frame. For the majority of governments however, traceability is a crucial factor in the migrant crisis. The countries who are not stepping up to their responsibilities may soon find themselves in the spotlight by others who are adopting and embracing the opportunities presented by these new technologies.

We’re delighted to already be working with over 50 government and local authority departments in the UK that have eradicated cash entirely from their system and just make payments electronically. We’ve also just been selected by one northern European country to provide payments to asylum seekers using prepaid cards: if other nations showed similar forethought, we would be someway in tracking migrant movement across the continent and providing supporting to those who need it most.