Net1 develops, implements and operates shared Automated Teller Machines (ATM) / Point-Of-Sale (POS) switching systems and tailormade smart card electronic purse applications to enable these secure affordable transaction channels.
SASS A, the South African Social Security Agency, part of the South African Government, administers the application, approval and payment of social grants. The new biometric solution provided by Ingenico and Net1 has been a key initiative in supporting the South African government in the implementation of a new, cost-effective electronic payments programme. It has helped SASS A save money, improve efficiencies and prevent fraud.
Manage customer-centric social security services
Millions of South Africans lack access to even the most basic financial tools. They don’t have secure places to keep or save money, and they lack reliable means to transfer it and use it. SASSA wanted to improve this situation while delivering welfare payments to its 10 million beneficiaries nationwide in a more efficient way.
Clamp down on social grant fraud
Fraud and identity theft was a problem in the previously cashbased welfare system. “A key driver of the new system was to put stringent measures in place for SASSA to ensure that only qualifying grant recipients – those really in need – are authorised to receive one of seven grants that SASSA offers.” explained Virginia Petersen, CEO of SASSA.
Net1’s subsidiary company, Cash Paymaster Services (CPS), uses Social Grant Distribution technology on Ingenico biometric terminals to distribute social welfare grants on a monthly basis to ten million beneficiaries in South Africa on behalf of SASSA. CPS offers a secure transacting channel between social welfare beneficiaries, SASSA and businesses.
Digital fingerprint identification for optimum security
CPS enrolls social welfare grant beneficiaries by issuing an EMV smart card that digitally stores their biometric fingerprint templates, enabling them to access their social welfare grants securely. The smart card is issued to the beneficiary on site and uses optical fingerprint sensor technology to identify and verify the user.
One-step identity verification
To confirm their identity and claim their welfare payment, the beneficiary simply inserts a smart card into an Ingenico biometric terminal and is prompted to present their fingerprint. If the fingerprint matches the one stored on the smart card, the smart card is loaded with the value created for that particular smart card.
Saving administration costs for SASS A
Just by moving from a cash-based system to electronic payments, SASSA has already saved on administration costs. Before March 2012, it cost SASSA on average R33 (US$3.33) per grant to pay beneficiaries. Under the new system, costs are R16.44 (US$1.66) per payment.
Increased security for SASS A grant beneficiaries
For beneficiaries, the smart card offers convenience, security, affordability, flexibility and accessibility. They avoid long queues at payment locations and do not have to attend on scheduled payment dates to receive cash. Personal security risks are reduced since customers no longer have to physically safeguard their cash or store it in their home.
Biometric fingerprint and voice identification technology also prevent fraud and invalid claims. “Between April 2012 and June 2013, over 150,000 grants were cancelled, which has led to a saving of R150 million (about US$15.1 million) per annum,” explained Virginia Petersen, CEO of SASSA.
Developing financial inclusion
Between March 2012 and July 2012, the SASSA card was cited as the main contributing factor to the 4% growth in South Africa’s banked population from 63% in 2011, to 67% in 2012 according to the FinScope 2012 survey. With the SASSA card, nearly one fifth of South Africans now benefit from having a formal banking product, helping them build a stronger future for themselves, their families and their communities.
Net1 is a U.S.-domiciled, NASDAQ listed company with its operations and management headquartered in South Africa and a market capitalisation of $1.4 billion. Net1 provides complete integrated business solutions through advanced data processing technologies. Net1 develops, implements and operates shared Automated Teller Machines (ATM) / Point-Of-Sale (POS) switching systems and tailormade smart card electronic purse applications to enable these secure affordable transaction channels.