South African Post Office chief executive Marc Barnes. Picture: Jacques Naude

JOHANNESBURG - CEO of the South African Post Office (Sapo) Mark Barnes, on Tuesday hit back at the South African Social Security Agency (SASSA) in Parliament during a meeting chaired by the Standing Committee on Public Accounts (Scopa). 

This comes after SASSA dropped a bombshell on Monday, announcing that that Sapo did not have the full capacity to take over social grant payments and effectively replace incumbent Cash Paymaster Services (CPS.)

Sapo has yet to reach a deal with SASSA to take over social grant payments after several meetings to resolve the impasse failed to succeed. SASSA has since been given a March 2018 deadline by the constitutional court to find a new service provider after its deal with CPS was declared illegal. 

Minister of Social Development, Bathabile Dlamini insists that the post office doesn't meet all of the requirements, based on her interpretation of the CSIR due diligence report.

However Barnes, in his address to the committee, pointed out that that within the 218 categories of performance in the CSIR  report, only eight requirements "where not met."  He said that this meant that Sapo had achieved a 97% pass in the evaluation and added that he intends on contesting the review of six of the requirements.

Barnes also told the committee that they should take note of the services that Post Office can provide -  "significant differences" within the economics of the transactions proposed.

These would include, allowing interest to be earned on undrawn monies, where previously the interest was retained by the bank. 

Barns also listed an allowance for free ATM withdrawals which SASSA beneficiaries have previously had to pay for. 

Also read: 'SASSA's plan to tender out grant payments is suspicious'

In his reasoning for wanting to "help" SASSA, Barnes highlighted one of the core competencies of Sapo which he said was the provision of banking services, "Post bank at the peak tans, does about 20 million and on average about 8 - 14 million transactions a month, we are a fully operational bank." His statement, a clear response to the Post Bank's [an autonomous division of Sapo] previous disqualification on the grounds of a shortfall in its banking services. "I need to make it clear that we are a designated participant in the national payment system, we perform all our own inter-bank transactions, so like any other auto-bank card, Post Bank is in a position to provide the same service. 

Barnes stressed that in the terms of the capital adequacy requirement, which requires 28.5% capital adequacy where most banks sit at around 12%, Post Bank operates at three times the norm and still has around R1.5 billion excess capital; which could be utilised to expand the core banking licenses, grow the call center capacity as well as the network upgrade. "[Post bank] has the sufficient capital for immediately,"  he said. 

"As far as the issue of cash payment in the deep rural area's, "I think it's common cause by now that that is most likely to be performed by cash-in-transit companies who are specialists, in particularly as it relates to the safety required at those points of payment," he said.

In his response to the issue of cash payments at pay-points, Barnes said that if Sapo was invited to assist, "we can provide a coverage that is greater than or equal to anybody else. If you're looking for a service provider, we've got 2500 points of representation which no one else has. What ever your distribution capacity is, we can enhance it."

- BUSINESS REPORT ONLINE