Cash Paymaster Services, a subsidiary of Net1 Applied Technology Services (Aplitec), has been awarded a substantial portion of the Eastern Cape Pension and Welfare tender.
The value of the core business of the three-year contract is estimated at R200 million to R300 million, although the business is expected to erode Aplitec`s earnings growth temporarily.
The tender was awarded through CPS Eastern Cape, a joint venture between CPS and empowerment partners.
Aplitec says the solution proposed to the Eastern Cape government will utilise its secure payment technologies to distribute social security grants to 300 000 to 400 000 pensioners.
The company adds that the final number of pensioners serviced depends on the final geographical area allocated to the joint venture, and this will be announced within a few weeks.
"Aplitec`s technology will now be used to service more than two million users in five provinces, which represents more than 70% of the pension and welfare business in SA," says Aplitec CEO Serge Belamant.
"Aplitec`s proprietary solution will ensure that all pensioners are provided with access to a myriad of financial and other products and services that will assist in the upliftment of their lifestyle."
The first year of operation in the Eastern Cape will focus on the creation of a registration and payment infrastructure that will include up to 1 593 new service points and the appointment and training of more than 300 new staff members.
As a result, the tender will erode Aplitec`s earnings growth in the next year, but Belamant says the following two years should provide strong earnings growth from the core business as well as the derivative revenue streams from the acquisition and servicing of such a large client base.
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