Social grant paypoints should not be an election issue, MPs warned

Politicians told not to try to keep costly paypoints open

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Photo of two men in parliament
Post Office officials Mark Barnes and Mdu Zakwe briefed MPs on progress since taking over the payment of social grants in April last year. Photo: Barbara Maregele

Politicians should not use cash paypoints for social grants as an election campaign topic, the chief operating officer of the SA Post Office (SAPO) has warned.

Briefing Parliament’s portfolio committee on telecommunications and postal services on Tuesday, COO Lindiwe Kwele said SAPO was considering ways to eliminate those cash paypoints which had proved costly and a safety risk.

“To run a cash paypoint costs R38,000. We have had some places where there are no beneficiaries but we incurred costs for security,” she said.

“We’ve had a few incidents of robberies, predominantly in the Eastern Cape, with the theft amounting to between 0.5 and 1% of our total. But R1 lost is R1 too many for us,” she said.

Kwele urged politicians campaigning over the next few months not to push for costly paypoints to remain open. “It’s really not helping us,” she said.

“It’s very important that we start exploring alternative methods of payment.”

Kwele said social grant beneficiaries had to be shown the different options.

The post office has been distributing social grants on behalf of the South African Social Security Agency (SASSA) electronically since April and in cash since September last year. The Black Sash has expressed concern that people in remote areas have to travel far to collect their grants in cash.

Kwele said SAPO was considering launching its own cardless payment plan called SAPO Pay. “It would work similarly to M-Pesa launched in Kenya, which is mobile money and is being used by people in rural areas, paying each other through M-Pesa system,” she said.

After her presentation, MPs praised the post office for its “significant” turnaround plan over the last few months.

DA MP Cameron Mackenzie congratulated CEO Mark Barnes and Kwele for “taking the organisation from something really broken to something showing a great deal of promise and working effectively”.

Mackenzie said the post office had so far done well with the “massive task” of paying out social grants.

ANC MP Juliana Kilian echoed Mackenzie’s praises. She too highlighted the importance of eradicating cash payments over time.

ANC MP Nokuzola Ndongeni joked with officials, asking whether other government departments were now lining up to work with SAPO.

Kwele told MPs that since taking over in April, over 7.5 million beneficiaries had been transferred to the new SAPO payment system and over one million beneficiaries had chosen to use other banks.

“We need to continue awareness campaigns to get the one million beneficiaries to migrate to us, because we still believe that we offer a far better and affordable product for beneficiaries.”

She said a total of R9.4 billion had been paid during the February payment cycle and as of Sunday, R5 billion had already been paid to beneficiaries during the March cycle.

Kwele said the post office was trying to find out about 150,000 people who had not yet collected their new cards. “We are working with SASSA to see whether these beneficiaries could be deceased or duplicates.”

She said the SASSA contract had given the post office an opportunity to get new equipment which had not necessarily been upgraded in ten years. “We had to get new equipment like new laptops, note counters, cash protection devices and automated cash dispensing devices. We are also dealing with access control at branches,” she said.

CEO Mark Barnes became tearful as he thanked MPs for their support. “I am overwhelmed by your compliments because that’s what keeps us going.”

He said the success with SASSA had “piqued the interests of other government departments” and he could see the post office assisting the National Student Financial Aid Scheme (NSFAS) with the distribution of student loans and helping Home Affairs with renewal of documents.

TOPICS:  Social Grants

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Dear Editor

We need to be in line with other financial institutions when coming to equipment system. As the post office, we came with a lot of renovations but failed to implement like money transfer. Using thump to withdraw and call phone banking to notify beneficiaries to be able to reverse or stop any illegal transactions. Systems needs to be upgraded so it can take a secon for a beneficiary to access cash so that they don't spend more time at the branch.

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