Net1 shares slump despite CPS efforts

Net1 UEPS shareholders did not appear to be impressed with the company’s contribution to ensuring uninterrupted delivery to 10.6-million social-grant recipients. The share price eased R2.65 in low-volume trade, closing at R156 on Tuesday.

The company had informed shareholders earlier that its subsidiary, Cash Paymaster Services, was on course to complete the April 2017 pay cycle in accordance with the prescribed timetable set down by the South African Social Security Agency (Sassa). On Friday, CPS credited the Grindrod Bank accounts of all 10.6-million recipients with their April grants.

At the close of business on April 3, 6.8-million recipients had accessed their grants via the national payment system or pay points, with a total value of about R7.8bn. “CPS processed a record 535,000 transactions per hour on April 1 without any service interruption or degradation,” said Net1.

It said CPS allowed recipients to choose the most convenient channel through which to access their grants — either through the national payment system, including ATMs, at participating merchants or at one of CPS’s 9,000 pay points.

A heavy presence of Sassa staff overseeing payments at the weekend may have helped ensure the smooth process.

Sassa CEO Thokozani Magwaza said he was pleased with how smoothly the payments were effected. He said he was particularly encouraged by indications that there were significantly fewer fraudulent deductions from the April payments.

Magwaza said Sassa would work with the Department of Social Development, the interministerial task team and CPS to establish a new payment system. Magwaza is keen to bring most of the system in-house with the assistance of banks, including Post Bank.

On Friday, Net1 confirmed it had agreed to extend its contract with Sassa for a further 12 months on the same terms and conditions.