The 10 million milestone marks the conclusion of the re-registration phase of the project, with social grant beneficiaries having received their new Debit MasterCard cards with biometric functionality, issued by Grindrod Bank, SASSA and Net1 UEPS Technologies (Net1).
Social grant beneficiaries were asked to re-registered onto the new system introduced by SASSA March this year in a move to minimise fraudulent grant applications and collections and cut administration costs by use of the electronic system.
According to Virginia Petersen CEO, SASSA,“A key driver of the new system was to put stringent measures in place for SASSA to ensure that only qualifying grant recipients – those really in need – are authorised to receive one of seven grants that SASSA offers. 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 new SASSA card is biometric and identifies social grant recipients using fingerprints, voice and other personal information to avoid fraud. The largely cash payments were costly, cumbersome and riddled with inefficiencies.
Before the new electronic payment system, SASSA spent an average R33 (US$3.33) per grant to pay beneficiaries compared to the R16.44 (US$1.66) per payment it is using now.
According to the FinScope South Africa 2012 survey between March 2012 and July 2012, the SASSA Debit MasterCard card was the main contributing factor to the 4% growth in the country’s banked population from 63% in 2011, to 67% in 2012. 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.
“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 advantage of the SASSA re-registration process is that each recipient has a bank account opened for them and comes with free monthly charges by Grindrod Bank. Recipients can deposit funds into their bank account via electronic funds transfer (EFT) or third party bank transfer. The SASSA Debit MasterCard cards can also 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.