Sapo will work with CPS during ‘phase in, phase out’ period

The “phase in, phase out” period during which South African Post Office (Sapo) plans to work in conjunction with Cash Paymaster Services (CPS) is essential for protecting beneficiaries.

Sapo CEO Mark Barnes was clarifying what the implications of the recent Constitutional Court ruling were on the relationship between the state-owned entity and the grant-dispensing service, which has been the subject of a long court battle that culminated in an order that the contract was unlawfully awarded and extended.

“We will have systems working in parallel. We will not switch off systems before we are guaranteed that they work. That was always contemplated. When the agreement was signed in December in 2017, we all agreed that we won’t have time to go through the testing phasing time.

“That is in relation to the electronic banking channel. There is a difference between those who get bank transfers through the system and through cash. This is purely for the electronic banking system, which is in CPS’ hands. This is the business that Post Bank is contracted to deliver,” explained Barnes.

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The cash-in-transit (CIT) component of the tender is “completely different” to the normal business of Sapo, and Barnes holds the view that, as this will always require an outsourced provider with cash and cash-dispensing machines, the post office is not planning on taking over this responsibility.

“What we are saying is that, why don’t you use post office branches instead of cash points, as we have branches close to paypoints? We are suggesting that you can substitute a third of beneficiaries who get paid by cash by using Sapo branches.

“These are almost a million of those beneficiaries. We have done an assessment, and we have 855 branches close to paypoints, post office can be used as paypoint. It is significantly cheaper because we are in the cash-dispensing business,” said Barnes.

Barnes is not supportive of the continuation of the CIT model, as this creates a number of logistical nightmares and is also costly. “My argument is that use state infrastructure, it is not a business but a service.”

The three tenders, which CPS is now free to tender for, are for the provision of a biometric system, systems development for the integrated payment system and production of cards. Barnes added: “These are naturally three things we don’t do because we are an infrastructure. We are confident that we will be able to deliver our mandate within the time and resources given.”