Net 1 pulls out of SASSA tender process
Net 1 UEPS Technologies today announced its withdrawal from the South African Social Security Agency (SASSA) tender process for a five-year, R10 billion contract for the payment of social grants.
The company previously reported management was analysing the request for proposals (RFP) to determine whether subsidiary Cash Paymaster Services (CPS) should participate in the tender process, or focus on its other financial technology businesses without being a direct contractor to SASSA.
"Management has recommended to the company's board of directors that CPS should withdraw from the SASSA tender process and the board has accordingly agreed that CPS should not submit a bid," Net 1 said in a statement.
"Management reached this conclusion after careful consideration of all the relevant factors, including financial feasibility of the RFP, further questions raised by prospective bidders, execution of the company's strategic plan, legal risks, reputational risk, and long-term value creation for shareholders."
It adds the deployment of its business plan, which focuses on providing a comprehensive suite of transactional products and services, will allow it to service all SA's unbanked and under-banked citizens, including social grant beneficiaries. However, this can now be done independently and without SASSA's limitations and constraints.
Net 1 says the business plan includes the continued successful deployment of its EasyPay Everywhere bank account, its biometric ATMs and mobile portal, its suite of financial and added value services, and the company's proven and innovative technological systems. "The company believes these activities will ensure a sustainable business model that will, over time, far exceed the benefits that could be realised from being the successful bidder for the SASSA RFP.
"In addition, the execution of the business plan will no longer be limited by a five-year contract (or potentially shorter if legally challenged) and provides the company with the ability to freely determine pricing that is both competitive and profitable, and removes any unknown or contingent liabilities associated with government contracts."
In addition, Net 1 expects to have more management bandwidth, which it believes will fast-track its international expansion, specifically the many exciting opportunities that Zazoo has identified.
"We are very proud of our achievements that have placed SA as a leader in social welfare delivery solutions. An achievement that has been recognised worldwide," says Net 1 chairman and CEO Serge Belamant.
"We have banked 10 million people, registered 22 million, eliminated fraud in excess of R3 billion per annum and implemented solutions to assist the poorest South African citizens. We have integrated 10 million people into the South African banking system and economy, which has resulted in us being able to provide financial services to them, thereby realising the goal of financial inclusion that all developing countries strive for."