Electronic payments a boon for social grant beneficiaries
About two million SASSA beneficiaries have had their social grants paid directly into their bank or post office account
About two million South African Social Security Agency (SASSA) beneficiaries have had their grant money paid directly into their bank or post office account thanks to the agency's decision to make electronic payments.
“It is part of fully complying with orders from the Constitutional Court and phasing out Cash Paymaster Services (CPS), the current service provider,” said SASSA's national spokesperson Paseka Letsatsi.
In March last year the Constitutional Court extended SASSA's contract with CPS for a year to fulfil the constitutional obligation of paying social grants to beneficiaries.
The Constitutional Court also ordered SASSA to advise beneficiaries of the advantages of having their grant paid directly into their bank or post office account.
CPS is responsible for the distribution of social grants to over 17 million beneficiaries. Its contract would have come to an end on 31 March 2017 but the Department of Social Development approached the Constitutional Court requesting that CPS continue to pay some recipients after that date.
The phase-in/phase-out approach to the CPS contract has led to a number of changes already planned or implemented.
From 1 March 2018 SASSA will be able to directly deposit the grants into about 5.7 million beneficiaries' accounts.
“This will bring about 80 percent of payment transactions under the control of SASSA by the end of March 2018,” Letsatsi said.
Low-cost bank accounts
SASSA is negotiating with the banking industry to develop a low-cost bank account, which will be subsidised by SASSA, so that beneficiaries get the full value of their grants without paying bank charges.
“These accounts will not allow electronic debits and are intended to protect beneficiaries from unauthorised debits, which have been a problem in the past.”
By April, the only beneficiaries whose payments won't fall under SASSA's direct control are those paid in cash at SASSA pay points.
“SASSA has already gone to the market for the cash payment category by advertising a tender. This represents just less than three million beneficiaries,” she said.
SASSA also conducted a countrywide awareness campaign to inform beneficiaries about these initiatives and to eliminate fake messages doing the rounds which state that beneficiaries must swop cards.
Migrating grant beneficiaries
The migration of grant beneficiaries to Postbank has already commenced.
According to the South African Post Office (SAPO) Chief Operating Officer Lindiwe Kwele, SASSA has signed off on the new card design for social grant beneficiaries and after a purchase order is issued to the preferred bidder the first batch of two million cards is expected to be delivered on 16 March 2018.
In the next phase, two million cards will be delivered every three weeks until 10.6 million cards have been delivered by 8 June 2018.
Kwele provided these details while briefing the Portfolio Committee on
Telecommunications and Postal Services on its readiness to migrate
beneficiaries to its new integrated grant payment system.
“The migration of beneficiaries to Postbank accounts has
commenced and is being prioritised and monitored weekly,” she stressed.
The briefing came after a December announcement by the Inter-Ministerial Committee (IMC) on Social Security that an agreement was reached between parties to pave the way for the implementation of a hybrid grant payment model.
Under the new model, SAPO would provide services such as electronic banking, including the provision of a central holding account and special disbursement accounts, signing up of new beneficiaries and biometric authentication of beneficiaries.
The state-owned entity would also be responsible for the development of the required software solution to replace the existing system as well as to provide cash pay points at its outlets.
Kwele said that a Corporate Holding Account will be opened once SAPO receives the required account opening documents from SASSA, which were yet to be handed over.
The opening of the Special Disbursement Accounts will also only take place on the commencement of the service in April 2018.
“SAPO has the capacity to deliver on its mandate or obligations. SAPO and Postbank do have the necessary funding to implement the project. An aggressive communications and marketing campaign [in partnership with GCIS] is underway,” she stressed.
Contingency plan
Kwele said that in the unlikely event that the new integrated grant payment platform is not ready by 1 April 2018, an interim Mzansi-like Account, with a web-service facility, has been created to enable on-boarding of new beneficiaries at SASSA offices from 26 February 2018.
“This solution will require SASSA officials to perform a light account opening and for the beneficiaries to collect their interim [Mzansi] cards at SAPO branches.”
“All such cards will be replaced with the new SASSA card during the phase-in/phase-out at no cost to SASSA or the beneficiary,” she said.
She said Postbank is developing the Special Disbursement Account structure on its core banking platform that can be used with the new SASSA EMV card until the new integrated grant payment solution has been developed.