Banks can pay out grants much cheaper
Former Department of Social Development director-general had proposed using the existing national payments system
The controversial social grants contract administered by Net1 subsidiary Cash Paymaster Services (CPS) would be obsolete if banks were approved to distribute grants at a lower cost to taxpayers, an inquiry into the matter suggests. Former Department of Social Development director-general Zane Dangor, in consultation with the Reserve Bank and the Treasury, had proposed using the existing national payments system to deliver social grants to 10.7-million recipients. Allowing any member of the national payments system to pay social grants — provided certain requirements, such as cost of withdrawals, were complied with — would prevent abuse by a single service provider and reduce the cost. This would also mean the South African Social Security Agency (Sassa) would not need to duplicate infrastructure in order to insource the service. Postbank could provide the banking platform to pay money into bank accounts, while competing with commercial banks to win grant beneficiaries as customers, ...
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