Banks in talks with Sassa over social grants payments

Johannesburg – Banks are talks with the South African Social Security Agency (Sassa) to find a solution for the distribution of grants, the Banking Association of South Africa said on Wednesday.

The organisation said it had been "working tirelessly with Sassa since 2017" to findthe best method of paying social grants.

"The existing banking infrastructure and products can cost-effectively and securely deliver social grants without abuse," it said in a statement.

"Banks have identified 8,2 million existing beneficiary accounts, of which 2,6 million have been used to pay grants of R3 035 992 513 in April."

Sassa, tasked with distributing social grants that cost the government more R150bn a year, has been embroiled in governance challenges, since the agency failed to appoint a new payment contractor to replace Cash Paymaster Services (CPS).

• READ: We have failed, Sassa admits

In 2014, the Constitutional Court ruled that the contract the agency signed in 2012 with CPS’s parent company, Net1 UEPS, was illegal and invalid, because correct processes were not followed.

In March, the Constitutional Court extended CPS’s contract for another six months, ending September 2018, so that cash payments for 2.8 million beneficiaries could continue in the interim.

The SA Post Office was in the past considered as a possible platform to distribute social grants, as Sassa scrambled to find a replacement.

The banking association said the intended memorandum of understanding would ensure that practical solutions could be implemented through the application of both SASSA and banks’ infrastructures and resources. 

"It is foreseen that many more beneficiaries will start using their existing bank accounts for grant payments over the next few months," it said.

The banking association has 32 members, made up of local and international banks.

* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.