Post Office off to grim start on social grants - TechCentral

Post Office off to grim start on social grants

Image: Steve Buissinne

After facing a worst-case scenario in which thousands of social grant beneficiaries have found themselves empty-handed since the start of July, the South African Post Office said it cannot guarantee a payment system without glitches.

Despite queuing at ATMs, pay points operated by the South African Social Security Agency (Sassa) and grocery retailers from 1 July, an estimated 500 000 beneficiaries across the country couldn’t access their social grant money.

The late payments to the country’s most vulnerable citizens, including elderly, disabled and sick beneficiaries, has called into question the Post Office’s capacity to take over the role of social grant payment from Net1’s subsidiary Cash Paymaster Services (CPS) over the next two months.

Post Office chief operating officer Lindiwe Kwele said it’s difficult to determine whether further late payments might be prevented as the state organ was expected to take over grant payments from CPS at the 11th hour.

“We have a responsibility to do everything possible to avoid delays,” she said. “But if you had to ask technology specialists if they could do this (take over the paying of grants) in less than four months, it’s difficult to say ‘yes’. We are dealing with glitches and people’s lives.”

The Post Office’s systems have been marred by glitches and crashes while it is in the throes of migrating beneficiaries from CPS-operated systems to its own banking services. In order to withdraw their money, beneficiaries are in the process of signing up for new Sassa/Post Office-branded cards, which will replace the Sassa/Grindrod (a partner of Net1)-branded cards.

The rebranded cards can be used by beneficiaries to withdraw their grants over the counter at 856 Post Office branches across South Africa, any of its merchants (such as Shoprite) or agents, and 1 070 bank ATMs. However, beneficiaries with the new cards complained about their cards not being activated, having no funds, or seeing an error message when attempting to withdraw their grants at ATMs and retail pay points.

Of the 1.1 million beneficiaries who have the new cards, about 60% have received their money, said Kwele. And for the rest, several factors are to blame, including high transaction volumes by beneficiaries since the weekend resulting in network congestion.

‘Not all at once’

“CPS had a monthly payment cycle that started from the first day of the month to the 20th. With us, beneficiaries were accessing money on the same day. We have informed beneficiaries that instead of coming on the same day to withdraw money, they should come when they need the money and not all at once,” said Kwele.

Another major reason for the delayed payments: the bank identification number of the new cards had not been loaded at ATMs and retail pay points, and was thus not recognised. “Through the Payments Association of South Africa, we were supposed to communicate with all merchants so they can accept our card and the new bank identity number. Some of our merchants (retailers) had not activated the cards, therefore they were rejected.”

Kwele said all these issues have been fixed. By Tuesday afternoon, its entire payment system had stabilised and was able to process transactions at ATMs and retail points.

Having taken over a large portion of electronic grant payments from CPS in April 2018, the state organ is now primed to administer physical cash payments to 2.5 million remaining beneficiaries when CPS’s extended contract with Sassa expires on 31 August 2018. If the Post Office successfully takes over cash payments by 1 September, the role of grant payments be exclusively in the state’s hands.

Kwele said the Post Office is not doing any “dry payment runs” — in other words, testing its systems for readiness — due to it having little time in taking over social grant payments to all 10.5 million beneficiaries.

“We are facing tight timelines thus we have gone straight to implementing our payment systems. Unless there is an adequate time for stress-testing, delays are bound to happen. But this is not an excuse and we cannot make any excuses for late payments.”

The Post Office has been at the receiving end of growing doubt about its ability to pay social grants on time and meet its own target of swapping all Sassa/Grindrod cards with Sassa/Post Office cards before the end of July.

A panel of experts appointed by the constitutional court to monitor Sassa’s progress in phasing out CPS’s contract is one of the fierce critics, raising fears that the Post Office might miss its own deadlines.

With 1.5 million cards swapped to date, Kwele said this number will increase to 3.7 million by July. “This target is attainable as the card swapping system is quite quick. We introduced batch processing (swapping more than 8 000 cards a day).”

Asked how the Post Office will prevent further late payments, she said: “We have scenario planning measures. The minute a risk (of non-payment) pops up, then we are able to address problems.”

  • This article was originally published on Moneyweb and is used here with permission

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