People queue in a South African Post Office branch. Picture: THE TIMES
People queue in a South African Post Office branch. Picture: THE TIMES

The South African Post Office (Sapo) will be involved in a "build, operate and transfer" arrangement with the South African Social Security Agency (Sassa) in preparation for the agency taking over the payment of social grants from the current service provider Cash Paymaster Services (CPS).

The Constitutional Court has extended the unlawful contract of Net 1 subsidiary CPS for a year to the end of March 2018, when Sassa has to have created an alternative means of paying the more than R140bn in social grants annually to about 17-million beneficiaries.

Sapo is eager to be involved in the payment of social grants to expand its business operations and utilise its extensive branch infrastructure. Sapo has the ability to provide Sassa with full access to the National Payment System through its Postbank division, which could provide grant recipients with access to all ATMs, retailers and point of sale purchases.

Postbank already has established payment channels, has experience as a payment provider of social grants and of operating as a bank.

In briefing Parliament’s social development committee on Wednesday, Sassa payment transition project manager Zodwa Mvulane told MPs Sassa had held a workshop with Sapo at which the arrangement was discussed. The aim of the collaboration would be to build the systems and processes necessary for Sassa to take over the payment function from CPS.

A letter of agreement between Sapo and Sassa was in place to provide opportunities for this type of collaboration. Mvulane said insourcing the payment function would reduce Sassa’s dependence on external parties and reduce the risk that beneficiary data would be divulged illegally, so opening them to abuse.

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