Mandatory change for citizens' finances: transition to cashless transactions
For citizens in Germany who receive Bürgergeld and are facing rejection from banks for a personal bank account due to the upcoming cash payment changes, there are alternatives and steps to consider.
From 2026, cash payments or transfers by check will no longer be made, and recipients must have a bank account with an IBAN to receive assistance payments electronically. If a bank rejects an applicant—often due to credit or compliance checks—recipients may consider the following options:
- Try other banks or financial institutions: Not all banks have the same acceptance criteria, so applying with a smaller or online bank may be an option.
- Open an account with specialized social welfare banks or institutions: Some banks or credit unions offer accounts tailored for welfare recipients or those with limited credit history.
- Seek aid from social services or local government agencies: They may help mediate with banks or provide alternative arrangements for recipients unable to open traditional accounts.
- Use basic payment accounts (BPA): Under EU regulations, everyone has a right to access a basic bank account to receive payments and use essential financial services, which may be offered even if full-service accounts are denied.
- Explore prepaid cards or electronic wallets supported by social agencies: Though not equivalent to full bank accounts, such financial products sometimes can receive funds electronically and provide limited payment functionalities.
It is advisable for recipients to consult local social welfare offices for guidance and support if banks reject their applications. The high cost of cash payments via checks, known as payment orders for settlement (ZzV), is the reason for the change. Experts recommend applying early to avoid rejection, as some banks may deliberately reject applicants for a basic account.
In case of problems, contacting a consumer arbitration board is advised. Affected individuals should be aware that a personal bank account will be necessary for receiving Bürgergeld from 2026 onwards. No relevant options specific to other countries or U.S. allowances from the search results were found related to bank rejections or alternatives in this context. The main confirmed information concerns Germany's Bürgergeld transition to electronic payments and the necessity of having a bank account with an IBAN.
A consumer considering various alternatives for opening a personal bank account due to credit or compliance issues can explore opening an account with specialized social welfare banks or institutions that offer financial services tailored for welfare recipients or those with limited credit history. In case a consumer encounters problems while opening a bank account, such as rejection or high costs, they should consult local social welfare offices for support and guidance, or seek help from a consumer arbitration board.
