Ray Mahlaka
5 minute read
25 Jun 2018
8:47 am

Net1’s CPS using ‘dirty tricks’ to sabotage Post Office

Ray Mahlaka

CPS is accused of preventing Post Office and Sassa officials from helping grant beneficiaries to sign up for the new Sassa/Post Office branded cards.

Cash Paymaster Services (CPS), the subsidiary of tech giant Net1 UEPS, is facing fresh allegations of using “dirty tricks” to sabotage the South African Post Office’s efforts to become the sole social grants distributor over the next three months.

This allegation has been made by the South African Social Security Agency (Sassa) civil rights group The Black Sash and a panel of experts appointed by the Constitutional Court to oversee the phasing out of CPS’s illegally-awarded contract by August 31, 2018.

The Post Office is already the social grants distributor, having taken over a large portion of electronic social grant payments from CPS in April 2018. The state organ is now primed to administer physical cash payments to 2.5 million remaining elderly and disabled beneficiaries from September 1, 2018.

However, the Post Office has missed its targets in swapping the Sassa/Grindrod branded cards, which are currently used by beneficiaries to withdraw grants at CPS cash pay points, with new Sassa/Post Office branded cards.

See table below of the Post Office’s missed targets in swapping cards.

Grindrod is a partner of Net1 in producing and underwriting Sassa/Grindrod branded cards.

The card swapping exercise is key as it will enable beneficiaries to migrate to the Post Office’s payment systems. The rebranded cards can be used by beneficiaries to withdraw their grants over the counter at 856 Post Office branches across SA, any of its merchants (such as Shoprite) or agents, and 1 070 banking infrastructure (ATMs run by commercial banks).

A report dated June 14 by a panel of experts, including, among others, Auditor General Kimi Makwetu and former Reserve Bank governor Gill Marcus, reveals that CPS might have a hand in stunting the Post Office’s progress.

Sassa has reported to the panel that CPS employees have, in several incidents, prevented Post Office officials from entering various cash pay points (owned by Sassa) to carry out the Sassa/Grindrod card swaps. “All Sassa’s regions have reported such incidents of intimidation and attempts to prevent the Post Office and Sassa employees from performing their duties at cash pay points,” the report reads.

EPE green cards

The stand-off between CPS and Post Office officials resulted in beneficiaries having to wait for hours to be paid as CPS officials prioritised grant payments for beneficiaries who own Net1’s EasyPay Everywhere (EPE) ‘green cards’ over beneficiaries who own the new Sassa/Post Office cards.

The EPE green card enables beneficiaries to access loans and insurance products through Moneyline, a subsidiary of Net1, and withdraw cash at ATMs.

The most scathing allegation is that CPS coerces beneficiaries to sign up for EPE green cards over Sassa/Post Office branded cards.

In some areas, according to Sassa, CPS opens certain pay points a day before the official pay point date, and when the beneficiaries come to collect the grants, they are told that only EPE green card holders are paid on that day, thereby almost coercing beneficiaries to apply for the EPE green card.

In its report to the panel, The Black Sash documents more incidents of intimidation.

The civil rights group said that when Post Office officials attempted to facilitate card swaps at a community hall in KwaZulu-Natal’s Claremont on May 29, 2018, they were sidelined by CPS officials, and approximately 50 beneficiaries were then given EPE green cards as a replacement instead of the Sassa/Post Office branded card.

The report states: “The Black Sash KZN regional office was requested by the Government Communication and Information System (GCIS) to facilitate a workshop in Welbedacht on Thursday, 31 May. GCIS regional communication co-ordinator Vasanthi Naidoo, who is based in Claremont and was present on the day, verified that CPS officials prevented Post Office from addressing or dealing with beneficiaries.

“GCIS was even threatened by CPS officials to not interact with beneficiaries or share information with them.”

Black Sash said the EPE green cards are “deeply problematic” as its investigations had revealed that beneficiaries had been tricked into signing up for these cards and that Grindrod Bank, together with CPS and Net1, retained confidential information of grant beneficiaries so that they could be offered loans, insurance products, prepaid water, and electricity.

A senior Sassa official told Moneyweb: “CPS is using dirty tricks. It’s as if CPS wants the Post Office to not be able to take over grants so its contract could be extended again by the Constitutional Court.”

Net1 responds

Responding to allegations, Net1’s group chief executive Herman Kotzé said the panel did not afford it the opportunity to respond to any of the allegations contained in its report. On Friday, Kotzé admitted “there were isolated instances” where CPS did not allow Post Office officials on the pay sites when the card swapping programme began.

He said no prior arrangements were made by Post Office and Sassa officials with CPS to provide the necessary security clearance and allow unidentified individuals into the pay point environment.

“Given the current security environment, allowing and providing access to any unauthorised individuals into pay points, without prior notification and the necessary security clearance, would have been irresponsible and a breach of security standards and norms. CPS will under no circumstances compromise on the safety of grant beneficiaries or its staff at pay points.”

On the marketing of EPE green cards, Kotzé said this is in line with Sassa’s request for beneficiaries to [be able to] open accounts with commercial banks and financial services providers of their choice.

Kotzé said three million grant beneficiaries have opted to open EPE green cards to date because of the “compelling value proposition offered by the account”, including being able to access grants through mobile payment equipment that is in close proximity to beneficiaries.

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