1. Progress Update on SASSA Transition & Payment of Social Grants
Presentation to Portfolio Committee on Social Development
13 March 2019
Out with the Old
In with the New
CPS
SAPO

2. Purpose
To present the Portfolio Committee on Social Development with a progress update on:
Card swap/ Migration process for beneficiaries with old SASSA card
State of social grants payments in the country
SASSA/SAPO collaboration/partnership
Fraud and corruption management

3. Card Swap/ Migration Process
The migration of all cash beneficiaries was completed by end September 2018
In order to fully decommission the old SASSA card by end December 2018, SASSA had planned to swap beneficiaries before end of December 2018
This would be done through the migration of beneficiaries who were still using the old SASSA card in the National Payment System to the new SASSA Gold card or any Bank of their choice
To meet this target SASSA embarked on a communication campaign urging beneficiaries to swap their old SASSA cards before 14 December 2018 to ensure they got their grants in the new SASSA card in January 2019
Approximately beneficiaries had not swapped their old SASSA cards by 20 December 2018 and these were auto migrated by SASSA to the new SASSA Gold card
These beneficiaries were required to come to SASSA to receive their new SASSA cards in order to immediately access their grant money

5. Card Swap/ Migration Process
By end of February 2019 a total of (59%) auto migrated beneficiaries had collected and activated their new cards
A total of beneficiaries had still not collected their cards
The North West, Eastern Cape, Northern Cape and Western Cape Regions all had 60% or higher card activation rates
Limpopo (47%) and Free State (51%) had the lowest
SASSA is currently looking into the reasons for non activation Factors being considered include beneficiaries being deceased, not living in the country or alternatively fraudulent beneficiaries.

7. STATE OF SOCIAL GRANT PAYMENTS

8. February and March 2019 Payments
The March 2019 payment file consisted of beneficiaries, an increase of from those paid in February 2019.
The March number of beneficiaries paid to date reflects an increase of compared to the number paid in December 2018.
The breakdown of the beneficiaries paid per bank:
Approximately 71% ( ) of the beneficiaries are paid through Post Bank. This is a slight increase (43 149) from paid in February The number of beneficiaries paid through the Post Office has increased by from December 2018.
Around 9.5% ( ) of the beneficiaries are paid by Grindrod Bank through the Easy Pay account, a decrease of from February and a decrease of from December 2018.
The balance 19.5% ( ) are paid through other banks - an increase of from December 2018.

9. Payment Extraction Statistics to March 2019
Row Labels
201808
201809
201810
201811
201812
201901
201902
201903
ABSA BANK
249934
283844
294956
296425
297124
297948
298056
298770
AFRICAN BANK
12023
15405
16285
16382
16332
16242
16155
16143
ALBARAKA BANK
118
127
136
142
149
155
159
165
BANK OF ATHENS
6447
7149
8208
9509
10844
12976
14555
15348
BANK WINDHOEK
153
152
140
139
138
BIDVEST BANK
9932
13364
14621
14776
14983
15171
15276
15450
CAPITEC BANK
532078
655150
704747
717022
724188
729328
735262
742524
FINBOND MUTUAL
31710
36893
40445
42924
45254
48044
49466
50214
FIRSTRAND BANK
332285
392767
410427
410906
409182
409307
407699
404452
GRINDROD BANK
HABIB OVERSEAS 3
HBZ BANK 8 9 10 11
HSBC BANK 1
INVESTEC BANK LTD 13 14 15
ITHALA
13710
15462
15568
15226
15078
14922
14857
14779
MERCANTILE BANK
184
208
223
234
236
239
252
258
NBS 55 56 54 53
NEDBANK 2
NEDBANK INCORP BOE 12
NEDBANK LIMITED
263363
327530
344219
346329
346614
347609
347251
346802
NEDBANK NAMIBIA 38 37 35 34
POSTBANK
SASFIN
STANDARD NAMIBIA
STANDARD SA
210926
241842
251182
251987
252400
252627
252232
252414
STATE BANK OF INDIA
TYME DIGITAL 4
UNIBANK
VBS MUTUAL 80 18
Grand Total

10. SASSA Card Usage – February 2019
A review of usage of the SASSA card in the February payment cycle indicates that just over 78% of the grant money paid by SAPO was withdrawn in the first 5 days of the month
By 27 February, 87% of the R to be paid by SAPO had been withdrawn.
In terms of channels used to access these funds, 61% of grant money was drawn at ATMs, followed by 34% at POS (retailers) and 4% over the counter at Post Offices (this includes cash payments at pay points).
Previous month’s data indicates similar withdrawal patterns and similar payment channel usage
Beneficiary behavior monitoring is still in progress but there is a shift from cash paypoints to other channels

11. SASSA Card Channel Usage

12. SASSA Card Usage February 2019 - Channels and withdrawals

13. Total Number of Pay Points
Cash Pay-Points
In terms of the Master Services Agreement SAPO should service pay points
However, SAPO serviced pay points in February 2019
This number was reduced to in March as pay points that have had zero beneficiaries for over 3 months were removed from the list
Region
Total Number of Pay Points
Feb
Mar
Limpopo
526
495
Mpumalanga 60
N West
173
145
Gauteng 12 10
Free State 67 38
KZN
342
303
E Cape
671
503
N Cape 43 27
W Cape 20 14
TOTAL
1914
1595

14. Cash Pay Points
SASSA and SAPO are currently analyzing cash pay point data over the last 6 months to finalize the list of pay points to be serviced
Payment schedules for the rest of 2019 will be confirmed and communicated once the pay points have been confirmed
Preliminary analysis is illustrated below as at end of February 2019

15. Payment Cycles Observations
The payment cycle has over the last few months stabilized and generally been successful
Beneficiaries have been able to access their grants through a variety of payment channels without major challenges
Access patterns suggest that most beneficiaries have found a way to access the NPS and get their money
Monitoring of beneficiary behaviour indicates that the majority of beneficiaries don’t want to wait for scheduled cash paypoint dates
Most use the first 5 days of the month to access their grants at ATMs and retailer POS. This results in long queues and over crowding at ATMs and retailers
The number of beneficiaries and amounts drawn at Post Offices is very low
Cash pay point numbers have shown a slight increase in some areas but a decrease in others
The incidence of fraud appears to be on the increase

16. Challenges
The continued uncertainty relating to use of biometrics and compromised verification systems remains a major challenge
Integration between SASSA and SAPO systems needs to be improve in order to have real time information flow
The capacity of the IGPS system to meet demands on the 1st day of the payment cycle is a concern
Payment Reconciliation needs to be improved
SAPO systems currently do not allow for full reconciliation of all paid and unpaid transactions particularly for cash pay points
SASSA backend systems require enhancement and improvement
The payment system at cash pay points is still not functioning at the appropriate optimal level
Need to optimize payment system, customer interface, information management to increase beneficiary confidence in the system.

17. SASSA / SAPO COLLABORATION/PARTNERSHIP

18. COMPLETION OF TRANSITION PHASE
Following the signing of a Master Service Agreement between SASSA and SAPO on 28 September 2018, a Service Level Agreement (SLA) was signed on 5 November 2018 to regulate all aspects of the business and working relationship between SASSA and SAPO.
The signing of the SLA effectively means that CPS has been completely phased out, the payment transition phase has ended and the South African Post Office has been introduced as the government partner to SASSA in the payment of social grants

19. Next Steps Post Transition stabilization
Establishment of Contract Governance Structures underway being finalized (Steercom, Operational committees, Executive)
Joint-Ministerial Interaction
Payments business being taken over and managed by the appropriate Operational Units and no longer the Payment Transition Project structures
In preparation for 1 April 2019, SASSA and SAPO are undertaking a review of the SLA to refine aspects such as governance arrangements and contract management, fee structure and service standards

20. FRAUD/ CORRUPTION ISSUES

21. Overview of Fraud and Corruption-related Challenges
There has been an increase in a number of fraudulent beneficiary grants withdrawals
It is believed that organised syndicates who work with both SAPO and SASSA staff are involved
The fraud incidents reported can be grouped into 3 zones of responsibility:
SAPO: incidents that have SAPO staff involved in the fraud committed
SASSA: where fraud originated within SASSA
Not SAPO/ SASSA: No SASSA or SAPO employees involved
Some beneficiaries leave their cards with “mashonisas” and report them as lost or as having not withdrawn the money
SASSA and SAPO are working with law-enforcement agencies to combat all reports of fraud
Several arrests have been made in KZN and Gauteng
A joint task team has been established to work with Crime Intelligence and other government agencies on this

22. Nature of incidents reported
Disputed withdrawals
Fraudulent account opening at SAPO
Re-issued cards at SAPO
Beneficiary account changed at SASSA
False beneficiary registration at SASSA
Illegal card swap/ exchange at SASSA and SAPO

23. Steps to address fraud
Both SASSA and SAPO have reviewed and strengthened their internal control measures at SASSA local offices and Post Offices
To address the verification challenges SAPO has agreed to perform on-line biometric verification of beneficiaries against HANIS
The reintroduction of Biometric Identity and Access Management within SASSA is underway
SAPO is enhancing IGPS controls and functionality features to reduce opportunities for fraud
Co-operation between both SASSA and SAPO related specifically to the fraud issues has been strengthened
An approach has been made to SSA and DPCI for assistance in identifying and addressing the challenges

24. Recommendations
It is recommended that the Portfolio Committee on Social Development notes progress report on SASSA Transition and next steps to stabilize the payment of grants

25. Thank you