File photo: INLSA

The South African Post Office (Sapo) and the South African Social Security Agency (Sassa) have reached agreement on a new grants payment system, Minister in the Presidency responsible for Planning, Monitoring, and Evaluation Jeff Radebe announced on Sunday.

The new "hybrid" system would also allow for participation by other partners, such as enterprises and commercial banks, in paying social grants to beneficiaries, he told reporters in Pretoria during a briefing on progress made by the inter-ministerial committee on social security on implementing the Constitutional Court's order on social grants.

The agreement - signed between the Sapo and Sassa on December 7 - gave effect to phasing in Sapo and the Postbank as a service provider, and also as one of the key channels through which grants would be paid, he said.

Objectives of the new system included flexibility for beneficiaries to access their payments; consistency in beneficiary experience irrespective of grant delivery channel; provision of a payment service within Sassa's regulatory environment; access to funds in the most remote parts of the country; reliability of payment service; and safeguarding and protecting the dignity of all beneficiaries.

Fraud, corruption, and leakage would be reduced by providing consistent payments of the right grant to the right person at the right time; ensuring proof of life of beneficiaries as an integral part of the payment process; and ensuring that beneficiaries were not registered more than once.

The new system would also reduce the cost to both Sassa and beneficiaries, which also saved the fiscus significant amounts, Radebe said.

The implementation plan provided for four key channels through which beneficiaries across the country would receive their grants - payments through bank accounts of the beneficiaries’ choice with commercial banks; through merchants in large retail shops; through the Post Bank of Sapo at its outlets countywide; and through a second tier of merchants which included village banks, general dealers, small retail outlets, spaza shops, and co-operatives legally registered and South African-owned and operated.

"This will be done essentially through the insourcing of grants payments in a phased way. One of the primary objectives of this phasing is to fundamentally reduce cash payments for security, efficiency, and cost-saving purposes," Radebe said.

The Sassa had adopted a five-year phased in plan:
- Phase 1: Payment of social grants as from April 2018 and Cash Payment Services (CPS) exit. (year 1);
- Phase 2: Implementation of the hybrid model that addressed the Constitutional Court directives (year 2 & 3);
- Phase 3: Development of Sassa insourcing infrastructure (year 4 & 5)

Radebe said the main issues South African grant recipients should be aware of as implementation started were:

- For about over two million beneficiaries who received their grants through bank accounts, Sassa had received the details of all these bank accounts and had confirmed them, and from January 1, 2018 grants would be paid directly into the recipient's bank account by Sassa.

- The implementation plan built in the option for recipients to migrate to the banking sector. Sassa was in discussions with commercial banks to establish a special low-cost bank account. 

More than five million South Africans who received their grants through electronic means – using a PIN at an ATM, a retailer, or other pay point – would be eligible for this special, low-cost account. 

To ensure that there were no problems as beneficiaries moved from their current payment point to the new commercial bank, the current Sassa card held by Grinrod Bank would be valid until the end of December 2018.

- Nearly 2.9 million South Africans received their grant payments in cash at more than 10 000 cash points across the country. 

These beneficiaries used biometric verification at the point to receive their grant in cash. For a short to medium-term these beneficiaries would continue to use the current cash payment method. Sassa would go out on a competitive bidding process to procure the service of a service provider for cash distribution at pay points.

- Sassa and Sapo would embark on a process to verify the mapping done by Sassa of pay points and Sapo branches.

The intention was to determine pay points that could be migrated to Sapo infrastructure to minimise duplication without compromising service delivery to beneficiaries. 

However, the norm of keeping pay points within a 5km radius of the beneficiaries would be maintained. The migration of pay points to Sapo facilities would facilitate natural migration to the Post Bank and electronic payment channels.

- Sassa and Sapo would co-operate on conducting the biometric authentication of beneficiaries through linking with the Hanis {Home Affairs National Identification System). 

Sassa would verify the biometric data of all beneficiaries in its possession and transfer this to Sapo for uploading for use during payment.

- Regarding enrolment of new beneficiaries, Sassa would build capacity to take the enrolment function from CPS. This would include the design of the requirements, upgrading infrastructure, procurement of biometric enrolment equipment, and training of staff. 

The Sassa and Sapo systems would have to be configured to enable the Post Office to issue a payment card once a beneficiary had been enrolled.

- Finally, Sassa and Sapo would identify card issuance sites where interface with beneficiaries would happen. Consideration was made to use pay points on payment days to issue new cards to beneficiaries. 

Communication would be issued to beneficiaries to request them to visit identified sites to receive their new cards.

The government would embark on a massive communication and education programme aimed at giving information on the choice of payment channels to be used as well as specific requirements of beneficiaries to enroll in new channels, Radebe said.

African News Agency