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SASSA roll-out faces challenges

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 04 Jul 2012

The South African Social Security Agency (SASSA) says the first two phases of the roll-out of a new biometric payment system have faced challenges, such as overcrowding at pay-points and equipment malfunctions.

The agency is rolling out a new biometric system in a bid to eliminate fraudulent payments to dead people, which will save it R800 million a year.

Net1 UEPS was granted the five-year bid, worth about R10 billion, to distribute social grants across SA's nine provinces. The company will provide the solution for payment of about 15 million grants to 10 million South Africans.

However, the win is being challenged by AllPay, a subsidiary of big-four bank Absa, which took SASSA and Net1 UEPS unit Cash Paymaster Services to court, arguing the deal was not properly awarded and does not comply with the necessary regulations and laws.

Payment issues

SASSA CEO Virginia Petersen, addressing a Department of Social Development Portfolio Committee meeting, says there were challenges in the first two phases of roll-out.

These included deductions made from social grants by service providers and micro-lenders prior to beneficiaries receiving their grant, equipment malfunctions due to connectivity issues, overcrowding at pay-points, and late payments, says Petersen.

In May, 12 000 people did not receive payments, and this is under investigation, Petersen notes. She says she will meet with the Reserve Bank and National Treasury to ensure better payment practices.

There is a need to lock the amount of money available to third-party service providers to 25% a month, so beneficiaries can benefit from the grants, she says. Many older people have been targeted by telephone sales, and more specifically, funeral services have been known to cheat people out of their money by encouraging people to pay for more elaborate services, she says.

Social development acting DG Wiseman Magasela points out that most poor people have no choice but to go to micro-lenders at some stage in their life, and are forced into lifelong loans they cannot afford to pay off. The department is considering funeral cover provision.

Three phases

The re-registration process involves registering biometric details of all beneficiaries, says Petersen.

The first phase of the three-step programme involved preparation and enrolling 35 431 new applicants in all nine provinces. Phase two, which was carried out between April and the end of May, saw old cards being swapped out for cash beneficiaries.

The third phase, which takes place between June and December, will see the full enrolment of all existing beneficiaries. All beneficiaries will be issued with a SASSA-branded smart card, which aims to save the department R800 million a year, as it will use biometrics to verify grant recipients.

More security

Petersen explains the new payment system requires all beneficiaries to be biometrically registered through all 10 fingerprints, voice prints and a photograph. Funds will only be available after a voice activated telephone call to confirm identity is conducted.

Benefits of the re-registration programme includes identifying fraudulent beneficiaries, erasing duplications, capturing the latest personal information, as well as the creation of a national database.

Petersen says the biometric smart payment card has an embedded chip that contains beneficiaries' biometric information, which ensures beneficiaries are alive when grants are paid out.

Beneficiaries can be paid out anywhere in the country at fixed or mobile pay points, or at over 1 400 merchant outlets, at no cost to the user. Grant recipients are not required to make a purchase to be paid out.

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