Johannesburg – In the latest addition to the Sassa debacle, it has now been revealed that banks are not equipped to deal with the Sassa payment system of social grants as things stand.
Spokesperson for Social Development Minister Bathabile Dlamini, Lumka Oliphant, said the opportunity for banks to take over the grant distribution responsibility came in 2015.
She said a request for proposals was issued by the department but none of the four major banks tendered for this business.
“The reasons are simple: the banks or the South African Post Office (Sapo) do not have the infrastructure to service the 11 million card holders. All their infrastructure is geared for the LSM groups four and up, and is particularly located in urban areas,” Oliphant said.
She said one of the solutions proposed by National Treasury was that the banks take over the payment of social grants on April 1. However, it was found that the banks do not have adequate infrastructure to cater for beneficiaries.
According to Oliphant, about 3.5 million beneficiaries access their grants through the pay-point infrastructure. Such infrastructure operates in an off-line environment due to the lack of communication infrastructure, while banking solutions only operate online, she said.
Oliphant told The Star that the biometric solution that CPS had implemented in order to tackle cheating the social grants system had managed to save the fiscus in excess of R10 billion over the five-year period that it had operated, which was more than the service fee paid to CPS by Sassa.
With the existing cards that had been issued to social grant beneficiaries, Oliphant said it would not be possible for banks to step in and begin where CPS would have left off on March 31, because the technology belonged to Net1, CPS’s parent company.
“It is not possible for any bank or banks to assume payment on April1 as the card requires a proprietary 10 digit signature to activate the card payment on a monthly basis.
“This technology is proprietary to Net1 to ensure payment to the correct person as well as to ensure proof of life prior to payment,” Oliphant said.