Earlier this year, Postbank announced it would no longer set up social grant pay points nationwide, sparking concern among the 19 million social grant beneficiaries of the South African Social Security Agency (Sassa).
Beneficiaries of the Older Persons pension grant, Disability grant, War Veterans grant, Care Dependency grant, Foster Child grant, Child Support grant, Child Support grant Top-Up and Grant-in-aid who previously withdrew from cash paypoints or Post Office branches were instructed to make use of alternative grant payment methods.
With CPPs shutting down, grant beneficiaries will need to utilise different National Payment System (NPS) channels. They can then still draw their social grants at ATMs and various retailers like Boxer, Pick n Pay, Spar, Shoprite, Usave, or Checkers.
This change requires using Sassa Gold or Postbank cards to withdraw funds at supermarkets. The new Sassa grant payment policy was officially implemented in April 2024, and beneficiaries are trying to get to grips new arrangements. Many rural beneficiaries are calling for the return of paypoints, citing numerous challenges.
Minister of Social Development, Lindiwe Zulu, acknowledged complaints about difficulties accessing Sassa grants and revealed that the agency is actively seeking "easier options" to address these challenges.
Sassa is looking for other options which are going to be easier options.
However, the use of cashpoints has drastically reduced over the past few years. In a February report to parliament, Sassa revealed that 142,000 beneficiaries (approximately 0.8% of all recipients) collect their grants at cash paypoints, while another 123,000 use Post Office branches.
Even the number of people who are going to the pay points, the numbers have reduced drastically, most of the people either go to the ATMs or they go to the shops where they can be able to procure.
The minister acknowledged concerns from rural beneficiaries who lack access to commercial banks or supermarkets, often forcing them to travel long distances to collect their grants, incurring additional costs. Zulu emphasised the security and cost issues associated with maintaining paypoints, stating, "We moved from the paypoints because it's quite expensive."
I know that in the rural areas that is not adequate because people want to be able to see the money, feel the money, but it's also an issue of security. As you are very much aware, we moved from the paypoints on the basis that it's quite expensive for us to do so.
Zulu confirmed ongoing discussions with service providers to find solutions to assist beneficiaries nationwide.
Close of Post Office Branches
The South African Post Office (SAPO) was placed under business rescue after recording losses of R6 billion in the past three years, including an R2.2 billion loss for the 2022/2023 financial year.
Postbank announced in 2023 several cost-cutting measures at the post office, including the retrenchment of approximately 6,000 employees and phasing out revenue streams that "failed to produce value," such as Over the Counter (OTC) payment services, including Sassa and CPP payments.
Consequently, Post Office branches stopped paying social grants.
Postbank attributed the reduction of physical cash paypoints to limited capacity and an increase in cash-in-transit heists. However, they believed the removal of these paypoints would not be disruptive, as approximately 98% of grant recipients receive their funds through NPS channels.
At the time, Evashnee Naidoo, Black Sash’s regional manager in KwaZulu-Natal, cautioned that this move would severely impact rural beneficiaries, who would be forced to use alternative ways to access their grants.
Naidoo explained that many would likely open commercial bank accounts, presenting unique challenges due to travel costs and potential payment delays, requiring multiple trips to ATMs or retailers.