Business

SA begins countdown to social grant drama

Read time 3min 30sec
CPS vehicles equipped with biometrics are used to distribute grants at cash pay points.
CPS vehicles equipped with biometrics are used to distribute grants at cash pay points.

Although the South African Post Office (SAPO) this week alluded to its state of readiness to distribute social grants, Herman Kotze, CEO of Net1, believes the national postal service needs to iron out a few key issues.

SAPO told Parliament's Portfolio Committee on Telecommunications and Postal Services that it has already started migrating social grant beneficiaries to Postbank, and that the South African Social Security Agency (SASSA) has signed off on the new card design for recipients.

According to the post office, two million cards are expected to be delivered on 16 March, after which two million cards will be delivered every three weeks until a total order of 10.6 million cards has been delivered by 8 June.

However, Kotze stresses the issue isn't SAPO ordering two million cards and having them delivered, rather it is having clear systems in place to issue cards to scores of beneficiaries, as well asserting how it will maintain the integrity of the biometrics verification systems.

Net1 previously stated it saves the South African government R2 billion per annum through the identification and removal of fraudulent beneficiaries.

SASSA also stressed the importance of a biometrics system that will not only curb unauthorised deductions from the accounts of cash-strapped recipients, but also root out fraud, as critical in a new payments process.

Kotze told ITWeb that right now every new cardholder is biometrically verified to make sure there is no duplication. Net1 helps SASSA distribute payments to 10.8 million beneficiaries through its subsidiary, Cash Paymaster Services (CPS).

There has to be a plan, a very clear and concrete plan with queue management and resource allocation in terms of how these cards are going to be issued, he stated.

"We know a tender was put out on the 22nd December for the procurement of a biometrics system and also the procurement of a grant administration system. Those tenders have closed, but I'm not sure if they have been awarded and if anybody is in a position, in six weeks from now, to be able to provide the biometrics service and everything else."

He added: "One thing that SAPO did say to Parliament is that if they don't have the ability to issue the new cards, then they will just use Mzansi accounts. These accounts don't work on biometrics, so I'm not sure how they will do this.

"The savings that government realised, which is R2 billion a year, through the elimination of duplicates, is of paramount importance that the system is maintained if it's at all of priority to SASSA and the National Treasury."

Chosen paymaster

The Net1 CEO is of the view that SASSA's application to the Constitutional Court (ConCourt) to extend its contract with CPS for six more months effectively is a request to be the paymaster of choice.

This month, SASSA filed an affidavit with the ConCourt seeking an extension of the suspension of invalidity of the social grants contract with CPS for another six months.

He explained: "SAPO also noted that they did ask for the extension but really only because they need to test systems and make sure they are ready to take over and they can't do that on the first of April.

"So it's all going to be a function of whether the newly-appointed service providers have the capacity to do so and have communicated with the beneficiaries and SASSA, and that there is a proper plan in place."

Kotze also stated his company will play whatever role the court deems necessary to play.

As part of the transition to the new service providers, SASSA will today meet with CPS to clarify the exact services which will be required from the social grants distributor.

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