Social grant payments: System migration root cause of Postbank glitches, says Gungubele

Postbank’s difficulty in paying social grants for September was a result of a system migration, according to government.

At least 600 000 beneficiaries were left with serious difficulties in accessing grants this month due to technical glitches experienced by Postbank, a state-owned financial institution under the Post Office.

The payout delays were coupled by the resignation of several Postbank board members.

Glitches resolved

Briefing the media on Thursday, Communications and Digital Technologies Minister, Mondli Gungubele, confirmed the glitches had now been resolved.

“We are delighted to report that Postbank has provided us with the assurance, according to their records, all Sassa [South African Social Security Agency] grant beneficiaries whose accounts were adversely affected by the system challenges on the 5th and 6th of September have now been corrected,” he said.

The minister said beneficiaries can access their money through bank ATMs, retailers, and Post Office branches as the funds would immediately be available in their accounts.

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“We also would like to make beneficiaries aware that once their money is paid into their Postbank account, they can access the money at any time convenient to them. We are making this point because our people think if they take their money once-off that is the solution even if they are not going to use [it all].”

He said the government would be “actively taking measures to prevent future challenges” to do with the payments.

“Noting that we will start with the October payment cycle in less than two weeks, we have started preparing to ensure we do not encounter challenges experienced by our clients in this month.”

Watch the briefing below, courtesy of SABC:

Root cause

Gungubele also sought to provide clarity on the main issue behind Postbank’s glitches saying it had been “misrepresented” in the public.

“We want to place it on record that these stories are false and generally fabricated with the damage they keep on causing. The root cause of the system challenges related to Postbank’s migration to a new [payment] system.

“Postbank’s systems upgrade program, of which the recent migration forms a component thereof, has been unfolding for a while in line with its 2022/2023 corporate plan and it is also a South African Reserve Bank requirement,” he said.

Postbank CEO Nikki Mbengashe said the planning of the system migration had started in July.

“So there was almost a month before we actually did the change,” Mbengashe said.

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“The criteria that we absolutely use is to always test what went wrong, did we fix it, do we have assurance that what went wrong was fixed? I think we have provided that because the issue happened on the 5th and the switch has been working as it should from the 7th.”

Meanwhile, Gungubele said it was not true the glitches were a result of the expiry of the Sassa bankcard, which will continue to be in operation until December.

“Beneficiaries can continue to use these same cards.”

The minister further assured the resignation of Postbank board members would not affect the payment of social grants.

“They were not involved in day-to-day running operations of the institution,” he said, adding that a new board would be appointed “soon”.

He called upon the public not to use the recent payout delays for “cheap political or criminal gain”.

Payment system

Earlier in the year, Postbank told Parliament its challenges in paying grants were hampered by the Post Office’s decision to discontinue the use of its integrated grant payment system (IGPS) across multiple branches.

The system was reinstated in November 2022 and was migrated to a secure cloud environment.

Postbank took over the administration of social grant payments in October 2022 amid the Post Office’s financial challenges, which has led to the closure of some of its branches.

The Post Office, which is under business rescue, had initially been appointed to manage social grants payments after the termination of Sassa’s with Cash Paymaster Services (CPS) in 2018.

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