The South African Social Security Agency (SASSA) is the country’s system that processes social grant and pension payments nationwide. The institution has been surrounded by controversy in recent months. This follows an April 2014 ruling by the Constitutional Court that ordered SASSA to re-issue the country’s R10billion grants tender.
The Constitutional Court’s Justice Johan Fronerman criticised SASSA for its “irregular” conduct when the tender was awarded to Net1 division Cash Paymaster Services (CPS) in 2012. Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System (UEPS).
The latest development is that electronic payments company Net1 UEPS Technologies has chosen to withdraw from the upcoming social grants tender process.
The company has also previously been criticised for selling loans and pre-paid airtime to social grant recipients in South Africa. It’s not all bad though – the company has assisted with more than R130 billion in social grants being distributed annually. There are currently 16 million individuals who are beneficiaries of social grants annually.
“We are very proud of our achievements that have placed South Africa as a leader in social welfare delivery solutions. An achievement that has been recognised worldwide!” said Dr Serge Belamont, Chairman and CEO of Net1.
SASSA proposed new requirements for the social grants tender, which were initially challenged by Net1. The company then changed its decision and is not reapplying for a tender. The runner-up in the initial tender process, Absa’s AllPay previously challenged Net1 successfully in court.
The company plans on “focusing more on providing products and services to South Africa’s unbanked and under-banked citizens including social grant beneficiaries, but independently and without SASSA’s limitations and constraints.”