Moving money: In the light of the increase in cash-in-transit robberies, the South African Social Security Agency is urging social grant beneficiaries to switch to other grant payments methods. Picture: THE TIMES
Moving money: In the light of the increase in cash-in-transit robberies, the South African Social Security Agency is urging social grant beneficiaries to switch to other grant payments methods. Picture: THE TIMES

The surge in cash heists is one more factor the South African Social Security Agency (Sassa) has to consider as it seeks to discourage grants beneficiaries from opting for cash payments.

In the past, high transaction costs have been the agency’s main worry, but the recent rise in cash-in-transit robberies across SA has forced Sassa to further discourage cash payments. The agency says it will enlist the military to help deliver cash to about 700,000 beneficiaries in far-flung rural areas.

"In such a case, we will consider extreme measures to locate them, such as asking institutions or individuals to assist to bring services to those people," Sassa acting CEO Abraham Mahlangu told Parliament’s social development portfolio committee on Wednesday.

"We will even consider the extreme measure of using the SANDF [South African National Defence Force] to pay [cash] grants in remote areas," he said.

The agency was also working closely with traditional leaders in a bid to locate beneficiaries in rural areas.

Sassa says it remains confident of ending its controversial association with Cash Paymaster Services (CPS) before September.

CPS currently administers the cash payments of social grants to 2.5-million beneficiaries. SA has about 17-million grant beneficiaries.

We are going to encourage our beneficiaries to move to other grant payment methods including mobile infrastructure, banks and merchants,
Abraham Mahlangu
Sassa acting CEO

In March, the Constitutional Court granted a further six-month extension of Sassa’s contract with CPS after the agency was unable to come up with a plan that would see it take over the payment of the grants.

The Constitutional Court initially ruled in 2014 that the contract with Net1 UEPS Technologies — of which CPS is a subsidiary — was unconstitutional because correct tender processes were not followed.

Earlier in 2018, Sassa announced it had launched a pilot programme, with the help of the South African Post Office (Sapo), that paid grant beneficiaries directly into their personal accounts held at commercial banks or through Sapo’s Postbank. Local pressure group Black Sash wants the government to cover the banking costs for beneficiaries opting to have their grants paid directly into their bank accounts.

Mahlangu emphasised that the agency was intent on minimising cash payments. "We are going to encourage our beneficiaries to move to other grant payment methods including mobile infrastructure, banks and merchants," he said.

The agency also pointed out that a new social grant (debit) card will be produced by Sapo, via an overseas-based supplier that was backed by financial services corporation Visa. CPS would no longer issue new Sassa cards.

Beneficiaries using the Sapo card will have the option of over-the-counter withdrawals at the post office. The card can also be used to buy goods at any store or to withdraw money at any ATM at a minimal interbank transaction fee. However, some restrictions have been placed on the card, including preventing debit orders.

CPS has been previously criticised for deducting money for airtime, loans and electricity from social grants beneficiaries.

IFP MP Liezl van der Merwe called on Parliament to launch an inquiry into CPS’s "unlawful and unethical business practices".

"We need a full Parliamentary inquiry into the unethical business practices and violation of the Consumer Protection Act…. We cannot just let them exit without holding them to account," said Van der Merwe.

ANC MP Sibongile Tsoleli said: "Whether they [CPS] like it or not, we have to get to a stage where we forget the name [CPS]."

phakathib@businesslive.co.za