MasterCard and the South African Social Security Agency (SASSA) have distributed about 10 million transactional cards over the past 17 months in a move that is said to have immensely benefited financial inclusion, minimized fraud and halved transactional costs.
MasterCard and SASSA celebrated the achievement yesterday following the introduction of the new biometric grant payment disbursement system that commenced in March 2012.
The president of International Markets at MasterCard Ann Cairns said “Ten million cards distributed to grant recipients in just 17 months is an outstanding achievement. What is more remarkable, however, is the impact that the SASSA Debit MasterCard card has had, and will continue to have, on the lives of the grant beneficiaries, and on the national economy in general”.
This rollout flowed out of the R10bn job awarded to a US operator, Net1 UEPS Technologies at the beginning of 2012, and through a tender process that has caused noise from losing bidder AllPay which was put together by Absa.
The benefits highlighted by SASSA and MasterCard yesterday may be unquestionable within the social grant space. However there will be questions about how the SASSA process links with the rollout of Smart ID Cards by the department of home affairs. The department launched the rollout of Smart ID Cards last month to replace the green ID book in a project that is set to cost the public purse billions of rands.
The Smart ID Card has been positioned as electronically intelligent feature with the potential to serve as a transactional tool. This does mean that the processes of rolling out Smart ID Cards and the SASSA cards, separated by a year, could have been integrated avoiding duplication and perhaps saving billions of rands in the public purse.
Nevertheless the achievements highlighted by SASSA and MasterCard yesterday are remarkable. Their statement said this milestone marks the conclusion of the re-registration phase of the project. Social grant beneficiaries have received their new Debit MasterCard cards with biometric functionality, issued by Grindrod Bank in association with SASSA and Net1 UEPS Technologies (Net1).
The statement said since March 2012 about 22 million social grant beneficiaries have re-registered onto the new SASSA system. The number of total registrations is higher because multiple grant beneficiaries can be loaded onto a single SASSA Debit MasterCard.
A crucial feature of the SASSA card’s biometric functionality is that it positively identifies social grant recipients using unique identifiers such as fingerprints, voice and other personal information.
SASSA CEO Virginia Petersen said “A key driver of the new system was to put stringent measures in place for SASSA to ensure that only qualifying grant recipients are authorised to receive one of seven grants that SASSA offers”. She added that between April 2012 and June 2013, over 150,000 grants were cancelled, which has led to a saving of R150 million (about US$15.1 million) per annum.
The statement said by simply moving all grant payments from largely cash payments, which were costly, cumbersome and riddled with inefficiencies, to electronic payments, the new system has already saved SASSA a considerable amount in grant administration costs. Before March 2012, it cost SASSA on average R33 per grant to pay beneficiaries. Under the new system, disbursement costs have been capped at R16.44 per payment.
President of International Markets at MasterCard Ann Cairns said “By supporting the South African government in the implementation of a cost-effective electronic payments programme, we are helping them save money, improve efficiencies and prevent fraud,” said Cairns. “More importantly, we are opening up a world of financial inclusion to millions of South Africans who haven’t previously had access to traditional financial services.”
“Millions of South Africans lack access to the most basic financial tools. They don’t have secure places to save money or reliable means to transfer it and use it for transacting. Through the introduction of the SASSA Debit MasterCard card, nearly one fifth of the South African population, now benefits from having a formal banking product, helping them build a stronger future for themselves, their families and their communities,” said Cairns.
The statement said between March 2012 and July 2012, the SASSA Debit MasterCard card was cited as the main contributing factor to the 4% growth in the country’s banked population from 63% in 2011. As at July 2012, 2.5 million SASSA MasterCard cards had been issued to grant recipients. Since then an additional 7.5 million cards have been issued to grant recipients which should further increase financial inclusion in South Africa.
As part of the SASSA re-registration process, each recipient has a bank account opened for them, which is offered free of monthly charges by Grindrod Bank. Recipients can deposit funds into their bank account via electronic funds transfer (EFT) or third party bank transfer.
The statement added that the SASSA Debit MasterCard card can be used anywhere MasterCard cards are accepted, and grant recipients can make purchases, check their account balances and withdraw cash at till points without incurring transaction charges at selected South African retailers. Recipients can also withdraw cash at any ATM, which does however attract transaction charges.
“It is our goal to continue to introduce innovative payment solutions that help make transacting quicker, safer and more convenient for everyone, everywhere and whenever needed, and to realise MasterCard’s vision of creating a world beyond cash,” said Cairns.