(Bloomberg) -- South African banks signed a memorandum of understanding with the South African Social Security Agency on finding ways to better distribute welfare payments.
Banks have identified 8.2 million existing beneficiary accounts, of which 2.6 million were used to pay grants of 3.04 billion rand ($242 million) in April, the Banking Association of South Africa said in an emailed statement on Wednesday. The agreement will assist in ensuring that practical solutions are implemented using the agency and banks’ infrastructure and resources, it said.
“With our countrywide branch and ATM networks and ongoing progress towards inclusive banking for all our citizens, South Africa’s banks are well positioned to assist in the payment of grants,” BASA said. ‘It is foreseen that many more beneficiaries will start using their existing bank accounts for grant payments over the next few months.”
South Africa is seeking a new distributor of social security payments that cost the government more than 150 billion rand annually after the Constitutional Court ruled in 2014 that a contract awarded to Net1 UEPS Technologies Inc. was unconstitutional because correct processes weren’t followed.
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