Postbank, once championed as a no-fee banking alternative for social grant recipients, has lost about 75% of its social grant customers in the past five years.
After the South African Social Security Agency (SASSA) ended its unlawful contract with Cash Paymaster Services for the payment of social grants in 2018, the South African Post Office (SAPO) took over.
Postbank, a subsidiary of SAPO, stepped in to administer payments to newly issued SASSA-branded bank cards, which provided social grant beneficiaries with a no-fee alternative to private banks.
But a series of events has caused an exodus from Postbank and an increase in social grant beneficiaries relying on private banks.
From at least 2022 onwards, customers experienced periodic payment delays, due to cyber attacks and other technical problems.
Postbank was issued notices by the SA Reserve Bank in 2021, 2022 and 2023 to replace all SASSA Gold Cards with new Black Cards that have improved security features.
But it was only in 2024 that a concerted campaign started to swap Gold Card users to the new cards by March this year.
This caused chaos across the country as millions of people rushed to switch their cards. The process was slow and marred with difficulties. The deadlines kept shifting, until Postbank finally announced that the Gold Card would keep working beyond 31 May.
The deadline has now been extended by another 15 months, with about 450,000 people still needing to switch to Black Cards.
SASSA has terminated its Master Service Agreement with Postbank, which will come to an end on 30 September.
Charts produced by The Outlier in partnership with GroundUp.
This article was originally published by GroundUp. It is republished by TechFinancials under a Creative Commons Attribution-NoDerivatives 4.0 International Licence. Read the original article
