Sassa looks to phase out cash payments

As social grants agency Sassa gave an update on the migration of social grant payments from Cash Paymaster Services (CPS) to the Post Office, its senior management team has told parliament of plans to phase out cash payments completely due to the increasing risk of transporting money.

Raphaahle Ramokgopa, Sassa’s executive manager for strategy and business development, told the portfolio committee on social development that the recent spike in cash-in-transit heists and the high cost of cash payment infrastructure means it will implement a cash reduction strategy to do away with cash payments in favour of electronic transactions. This will happen over the next five months.

“In the long term, we want to do away with the cash payment component because it is not safe and if you look at the (cash-in-transit) heists that are happening recently, you can see that it is not something that we can sustain over the long term,” she said.

Ramokgopa’s remarks come as Sassa works to ensure that all beneficiaries will, at the end of the phasing-in phasing-out process, be able to receive their social grants without interruption.

In March, the constitutional court granted an order for CPS to continue paying social grants to those who receive them in cash for another six months.

“The guiding principle for the next five months for Sassa is such that CPS will be eliminated fully by September 2018. Cash payments will be reduced drastically. So, beneficiaries who stay in areas where there is developed payment infrastructure will be migrated to electronic forms of payment and those that would still like to use biometrics for withdrawals can go to Post Office outlets for verification and payments. But in remote areas we have developed an alternative strategy to address beneficiaries who are residing in areas where there is no payment infrastructure.

“Our new payment model is premised on Sapo (the Post Office) as the dominant player, but we also engaged with the commercial banks and retailers such as Boxer, Shoprite and all the big retailers in general and they have all agreed that they would like to participate and we are in engagements with them to sign agreements so that they can provide the services,” she said.

Ramokgopa said that as of 4 June there were approximately 10.8m social grant beneficiaries who receive their grants through the agency’s hybrid model.

New cards

Out of these, more than seven million beneficiaries use the old Sassa/Grindrod payment card. This includes 1.9m who get their payments using the biometric card verification method at cash pay points, merchants and ATMs and about 5.5m who receive their grants using the old Sassa payment card using a Pin.

Some 1.2m beneficiaries receive their social grants directly into their own personal bank accounts. A further 2.5m beneficiaries receive their social grants at pay points.

After the new Sassa/Post Office card was piloted on 7 May, the plan was to ensure that the new card is rolled out by the end of July 2018 through the card-swap drive, whereby the old card is replaced with the new one.

While 250 000 of the new SASSA/Post Office cards were produced in April, in May, 1.4m out of a targeted 2.3m cards have been produced and 63 248 had been given to beneficiaries as part of the swap programme by 25 May.

The two entities aim to produce four million cards in June with a target to swap 2.5m cards, while it plans to swap 3.7m cards of the further four million cards that it will produce in July. In August, the two entities aim to swap about 1.4m old cards with the new ones.

Ramokgopa said the plan was to ensure that the over two million beneficiaries who are collecting grants from 8 086 cash pay points are reduced to 800 000.

“And because we have cancelled the cash payment tender, we have decided that our card swap programme will prioritise primarily those people at cash pay points because, if they have a new card, then we will be able to deposit money.”

She said that the alternative plan was to ensure that the Post Office, which is currently in the process of procuring mobile ATMs, rolls them out to remote areas by August.

“However, for those pay points where there are few people, we will be looking at the possibility of contracting local players to transport the beneficiaries to the nearest pay points.

“We are also engaging with the defence force and the police to assist us in terms of getting to transport money to those areas. Sapo is also extending its cash-in-transit contract to accommodate this arrangement that we are working on,” she said.  — SAnews