JOHANNESBURG -Net1 UEPS Technologies, the parent company of Cash Payment Services (CPS) will have to negotiate with South Africa Social Security Agency over the pricing of the last six months of its contract to distribute social grants after the Constitutional Court said it could not at this stage interfere.
Treasury had earlier this year recommended Sassa to pay CPS rate excluding VAT of R44.35 for cash payments and R16.94 for biometric payments performed by CPS, against the previously contracted rate of R14.42. However, Sassa was of the view that the Constitutional Court had to rule specifically on the matter in order for them to adopt the Treasury recommended rate. CPS had originally requested R66.70 per beneficiary for cash social grant payments.
This forced CPS to approach the Constitutional Court in an urgent application to obtain the Court’s endorsement of the Treasury recommended rate.
The apex court however on Friday ruled that it did not consider the matter to be urgent. “It is not in the interest of justice to hear it because nothing prevents the parties from coming to an agreement on increased payments without court sanction, and if they do not, normal legal processes in other courts must be filed to determine the effects,” the court ordered.
Net 1 last month reported losses of R557 million first quarter 2019 exchange rate for the last six months of the contract. At the time the company at the time said it hoped the court will ultimately finalize the complete matters on the contract.
Chief executive of Net1 Herman Kotzé on Friday said the group wanted to finalise the matter speedily.
“We welcome the Constitutional Court clarification that its consent is not required to finalize the pricing for the last six months of the contract between CPS and SASSA,” said
Kotzé.
“We look forward to engaging directly with SASSA to finalize our remuneration in accordance with the Treasury recommendation for the six-month period ending September 30, 2018, and bringing the six-and-a-half-year contract to its conclusion.”
Sassa could not be reached for a comment.
SASSA's business ties with CPS came to a close when the extended contract expired at the end of September. The social security agency had from 2012 relied on the services of CPS to pay 10.8 million beneficiaries through cash payments, direct deposits and electronic payments.
The post office took over the payment of social grants from the beginning of October. The Constitutional Court last year ordered the Social Development Department to find a new grants distributor.
The conclusion of the matter would bring to an end to an acrimonious relationship between Sassa and CPS. Sassa in July filed a report to the Constitutional Court arguing that there was an orchestrated attempt to delay the migration of grant recipients into Postbank by CPS.