The South African Post Office (SAPO) is advertising for a “reputable card scheme” to issue cards for Postbank over a period of five years.
These will replace the South African Social Security Agency (SASSA) cards used to pay out a multitude of government grants.
SAPO secured the contract to be the official distributor of SASSA grants in 2017, following a “social grant crisis” that saw the Constitutional Court being called in to intervene.
As part of this agreement, a new SASSA card was brought in during 2018 to replace the 10 million cards issued by Cash Payment Services, the previous contract-holder.
In June last year, the Department of Social Development revealed that over 22 000 fraud cases involving the SASSA/SAPO-branded payments card were reported in the 2019/2020 financial year.
This required the payment of over R43 million in reimbursements to SASSA beneficiaries that were defrauded of their grants.
A couple of weeks later, news broke that a major security breach had occurred at Postbank's old data centre in the Pretoria city centre in 2019, exposing the personal data of millions of social grant beneficiaries and other account-holders.
As a result, reports stated that about 12 million Postbank cards would need to be replaced at an estimated cost of R1 billion.
As 2020 drew to a close, social development minister Lindiwe Zulu told Parliament that the South African Reserve Bank had issued an instruction that all the current SASSA cards would have to be replaced as they are potentially compromised. Additionally, SASSA had taken a decision not to issue any more of the existing cards.
“Discussions are under way with SAPO and Postbank to ensure the replacement of the cards is done with the least disruption to the clients,” she said.
Delayed action
Eight months later, SAPO published a request for proposals for the replacement of SASSA cards.
In the tender documentation, Postbank says it wants to secure a “card scheme” for the issuing of cards for “Postbank (SASSA) business” for a period of five years.
The scope of the contract will include issuing of cards, advisory services, project management, product support, hardware support, systems integration, systems testing and product testing.
The card must adhere to EMVCo standards, with magstripe fall-back features, and should be able to perform secure and convenient card transactions that are acceptable within the South African National Payment System, as well as cross-border/international transactions. Cards will be issued through Postbank's appointed card manufacturer, which has not been named.
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