1. Progress on Implementation of The Constitutional Court Order
Presentation to Portfolio Committee on Social Development
6 June 2018
Out with the Old
In with the New

2. Presentation Outline Purpose Background Current Payment Outlook
Migration of beneficiaries from the current CPS/Grindrod card to the new SASSA/SAPO card
Decommission pay-points in areas where there is payment infrastructure including SAPO branches;
The cash payments reduction plan
Alternative strategies for beneficiaries residing outside the 20km payment infrastructure
Communication
Risks and Mitigations

3. Purpose
The purpose of this presentation is to brief the Portfolio Committee on:
the plans to execute the migration of beneficiaries from the old SASSA/Grindrod card to the new SASSA/SAPO card through the card swap program.
plans to decommission pay-points in areas where there is payment infrastructure including SAPO branches;
The cash payments reduction plan
Alternative strategies for beneficiaries residing outside the 20km payment infrastructure

4. Background
SASSA approached the Constitutional Court on 6 February 2018, requesting further extension of the suspension of the declaration of invalidity of the contract with CPS in relation to the cash payment services, upon realising that it will not finalise the procurement of a new cash payment service provider.
On 23 March 2018 the Court extended the suspension of the declaration of the invalidity of the contract between SASSA and CPS for a period of six (6) months – ending September 2018.
The extension was only for cash payment services but in some areas SAPO was not ready to perform on-boarding of beneficiaries - CPS did some enrolment and card issuance
There were a number of challenges with the new cash payment tender which led to review and subsequent cancellation of the cash payment tender

5. Background (cont…)
Government took a decision to request the SAPO to extend the original agreement
to include more than 2 500 000 beneficiaries that were previously earmarked for payments by the cash payment service provider;
The current Service Agreement with SAPO is in the process of being amended to incorporate the additional services that SAPO will be rendering, subsequent to cancellation of the cash payment tender.
Beneficiaries who choose to receive payments through their commercial accounts (in line with Regulation 21 (1) (a)) will also be supported

6. Current Social Grants Payment Outlook
There are approximately 10.8 million (as at 04 June 2018) social grant beneficiaries who receive their grants through the hybrid model as follows:
beneficiaries receive their social grants using Biometric CVM at cash pay-points, merchants and ATMs.
These payments are facilitated by CPS in line with Constitutional Court judgement of March 2018.
The number decreased by from in April 2018 to in June 2018
The SASSA/SAPO plan is to issue the new SASSA/SAPO payment card to these beneficiaries by end of July 2018 through the card swap programme (ideally SASSA would have preferred to complete the card swap by June, however there were technical clichés experienced, which slowed down the card swap process).

7. Current Social Grants Payment Outlook (cont…)
Direct ACB Transfers in June 2018
beneficiaries received their social grants directly into their own Personal Bank Accounts (excluding Grindrod)
There were 7.7 million Grindrod ACB payments
Approximately 5.6 million of these payments were into the old SASSA payment card for beneficiaries using PIN.
These beneficiaries will be issued with the new SASSA/SAPO payment card as SASSA seeks to decommission this card after September 2018
SASSA will not deposit grants into the old SASSA payment cards/ accounts beyond September 2018.
SASSA’s is engaged in a process to ensure that all banked beneficiaries submit mandates authorising SASSA to pay into their bank accounts.

8. 5 MONTHS PLAN

9. Guiding Principles:
CPS payment services to be eliminated by September 2018
Cash payments reduced drastically (beneficiaries who stay in areas where there is developed national payment infrastructure will be migrated to electronic forms of payments)
An alternative strategy developed to address the beneficiaries residing in remote areas
New model positions SAPO as dominant player, with commercial banks merchants and retailers as secondary players in the value chain
Critical driver is the expedited card production & intensified card swap programme supported by an offline solution to circumvent network and system congestion
Decommission traditional pay-points in phases

10. Migration of beneficiaries from the old SASSA/Grindrod card to the new SASSA/SAPO card.

11. Card Swap Programme
There are more than 7 million beneficiaries currently using the old SASSA/Grindrod payment card
Approximately 2 million receive their grants using Biometric CVM at cash pay-points, merchants and CPS ATMs.
Approximately 5. 5 million receive their grants using the old SASSA Payment Card using PIN
SASSA plan is to migrate all these beneficiaries to the new SASSA/ SAPO card through the card swap programme by August 2018.
Priority will be given to those beneficiaries receiving their social grants at pay points
On receiving the new SASSA/SAPO cards, beneficiaries can access their grants through any of the following methods:
SAPO outlets closest to them;
through the use of the available banking infrastructure;
existing retail merchants; and
numerous point of sale devices in close proximity of their residential areas.

12. Card Production and Card swap Targets
Period
Card Body Production Capacity
Actual No. Of Cards Produced
Card Swap Target
Card Swap (Actual 25 May)
March ‘18
April ‘18
May ‘18
63 248
June ‘18
July ‘18
August ‘18
Total 1 

13. CASH PAYMENTS REDUCTION PLAN

14. Cash Reduction Strategy
Of the 3.1 million beneficiaries that received their social grants using Biometric CVM in April 2018, 2.2 million went to cash pay-points.
SASSA has taken a decision to reduce the number of beneficiaries paid at the cash pay points due to the following:
South Africa has fairly extensive and developed National Payment System.
cash transportation and management has become increasingly risky and expensive
Majority of the beneficiaries use multiple payment channels (i.e., they move between cash pay-points and merchants and biometric ATMs)
The primary objective is to migrate majority of beneficiaries who are currently collecting their grants from the cash pay points to alternative methods.
Target is to reduce the number of beneficiaries paid at cash pay points from over 2.2 million to approximately
The end goal for SASSA is to completely do away with the cash payment component of social assistance services.

15. Cash Reduction Strategy (cont…)
Critical to the cash reduction plan is
the expedited card production and card swap programme
Decommissioning of pay-points
Upgrading infrastructure of SAPO branches to absorb the high volumes of beneficiaries
On receiving the new SASSA/SAPO cards, beneficiaries can access their grants through any of the following methods:
SAPO outlets closest to them;
through the use of the available banking infrastructure;
existing retail merchants; and
numerous point of sale devices in close proximity of their residential areas.

16. Cash Payments Reduction Targets
Target Date
Est. No to be paid at cash pay-points
Intervention strategy to reach the target
April 2018
Beneficiaries with PINs encouraged to use electronic payment infrastructure
May 2018
Decommissioning of SASSA pay points (259)
June 2018
SAPO Card Swop capacity ( ) in May
Increased Reduction of payment file to exclude unlinked CSG in urban areas
Decommissioning of SASSA pay points (1228)
July 2018
SAPO June Card Swop capacity (2.5 million including Old SASSA card beneficiaries using electronic payment infrastructure)-Weekend campaigns-Commencing in Limpopo-Venda area (date tbc)
Decommissioning of SASSA pay-points (1751)
August 2018
SAPO July Card Swap capacity (3.7 million including Old SASSA card beneficiaries using electronic payment
Decommissioning of SASSA pay-points (1700)
September 2018
Residual beneficiaries using cash pay points in remote areas.

17. Decommissioning of Cash Paypoints
Traditional pay-points in areas where there is national payment infrastructure and active SAPO outlets will be decommissioned.
This intervention will reduce the number of cash pay- points from to a projected by the end of August 2018.
The number of residual beneficiaries to be served at remaining cash pay-points is approximately 789 954.
The table below summarises SASSA Plan to decommission identified pay-points:

18. Decommissioning of Cash Pay-points
Region
Total No. of pay points
May
June
July
Augu st
No. to be    cl osed      
Remaining
No. of beneficiaries EC
2 590 -
512
513
134
1159
1431 FS
212 98 97
195 17
14 643 GP
144 87 44
131 13
2 411
KZN
1 700
449
469
271
1189
511 LP
1 839
433
991
1424
415
80 504 MP
386 38
113
151
235
92 361 NC
344 43 88 89
220
124
44 396 NW
609 81
174
268
341 WC
262 80
115 33
228 34
25 985
Total
8 086
1 282
1 878
1805
4 965
3 121

19. Beneficiaries residing >20km outside the national payment infrastructure

20. Beneficiaries residing outside 20km radius of NPS
Region
Remaining
No. of beneficiaries EC
1431 FS 17
14 643 GP 13
2 411
KZN
511 LP
415
80 504 MP
235
92 361 NC
124
44 396 NW
341 WC 34
25 985
Total
3 121

21. Alternative Plan – Remote areas
Total number of beneficiaries: * : No of pay-points: 3 121
Beneficiaries residing >20km outside the National Payment Infrastructure and outside of SAPO infrastructure coverage
These beneficiaries will be issued with the new SASSA/SAPO card during the card swap scheduled for completion on 30 July 2018.
Although social assistance will be deposited into the accounts of all these beneficiaries, the challenge of lack of payment infrastructure to allow these categories of beneficiaries to withdraw or access their monies remains.
The primary intervention in this regard is that SAPO will procure mobile cash dispensing machines to service outlying locations by July 2018.
SAPO has commenced with the procurement process for the portable cash dispensing machines and it is envisaged that they will be available before the end of September 2018.
In addition, SAPO is in the process of extending the scope of its current Cash in Transit contract to accommodate the additional numbers and sites.
Banks have also been engaged on the option of bringing mobile banking infrastructure in these areas

22. Alternative Plan – Remote areas (cont…)
Beneficiaries who can migrate to banks of their choice, in particular the recipients of the Child Support Grants (CSG), are being encouraged to do so.
For pay-points with smaller numbers, SASSA and SAPO, as a temporary measure will contract local transport industry to transport beneficiaries to nearest SAPO outlets or merchants or any available NPS Infrastructure on specific days of the month whilst SAPO is working on developing its payment infrastructure.
Under extreme circumstance, SASSA and SAPO will enlist the support of the SANDF to go and pay grants in those areas that are still not fully covered by the various payment channels.
Regulation 24 and 25
SASSA will continue to encourage beneficiaries who are unable to access their grants regularly due their old age, disability or frail conditions to use provisions of Regulation 24 and 25 of the Social Assistance Act, to appoint by way of a power of attorney, procurators or individuals or institutions to receive social assistance on their behalf.
Currently there are 308 789 registered procurators who receive the social grants on behalf of beneficiaries, particularly older persons and people with disabilities.

23. Summary of Communication plan

24. Stakeholder engagements
The successful implementation of this change programme lies in extensive stakeholder consultations and extensive communication
Key Stakeholders to be engaged are:
Traditional and community leaders (Consultation with the various Houses of Traditional leaders is also underway)
Beneficiaries
Auxiliary social workers are being appointed to conduct house visits
Schools and teachers will be engaged as disseminators of information
Targeted communication and marketing campaigns through various media platforms. Pamphlets and radio adverts have already commenced in most of the indigenous languages
Weekend bulk card swap blitzes in community halls, traditional authority offices and other identified beneficiary catchment areas.
Other media platform activities will commence in the month of June The procurement of specialist integrated communications and marketing service providers is underway.

25. Above The Line Tactical
SABC 1,2,3, Mzansi, Skeemsam, squeeze backs
Card swap Comms Plan
National campaign TV
SABC all languages, 702, kaya, Power
Radio
Billboards
Strategic points of entry gantries nationally
Lamppost
Print ads
Regional campaign
Below The Line Tactical
Radio Community
Door2Door
Mall Activations
Posters
TV Adverts & slots
Stakeholder engagements
Schools addresses
May – Sep ‘18
June – Sep ‘18
June – Sep ‘18
April – Sep ‘18
June – Sep ‘18
May – Sep ‘18
June – Sep ‘18

26. Risk Management RISKS MITIGATIONS DEPENDANCIES
Inadequate SAPO branch physical infrastructure
Upgrade of SAPO branches to service additional cash beneficiaries
Funding – see Financials for details
Inadequate IT infrastructure in SAPO branches
Upgrade SAPO IT and network infrastructure to service additional cash beneficiaries
Inadequate Security, CIT and Guarding
Increase capacity to service additional cash beneficiaries
Possible partnership with SANDF
Under capacitation of HR in SAPO branches
Additional HR capacity to service additional cash beneficiaries
Insufficient cash at branches
Cash projections by SAPO branches
Prefunding of SAPO branches
CPS counter communication – confusing beneficiaries
SASSA/SAPO communication plan implementation
None
System response – network and integration
Increase system capacity and performance and consider off-line

27. Recommendations
It is recommended that the Portfolio Committee note and support
the plans to execute the migration of beneficiaries from the old SASSA/Grindrod card to the new SASSA/SAPO card through the card swap program.
plans to decommission pay-points in areas where there is payment infrastructure including SAPO branches;
The cash payments reduction plan
Alternative strategies for beneficiaries residing outside the 20km payment infrastructure
Out with the Old
In with the New