South Africa enlists MasterCard to distribute welfare through biometric debit cards

31 July 2012 | 5485 views | 2 credit card chip

The South African government has called in MasterCard to help it distribute welfare benefits to millions of people through biometric debit cards.

Since March, the South African Social Security Agency (Sassa) has worked with Net1 UEPS Technologies and Grindrod Bank to distribute more than 2.5 million MasterCard cards which use biometrics to help fight fraud, identifying grant recipients using fingerprints and other personal information.

South Africans can use their Sassa cards to pay for goods and to check their account balances for free at the point-of-sale. In addition, they can withdraw cash at ATMs and in participating stores for a charge.

A grant recipient in #SouthAfrica uses her new #SASSA #Debit #MasterCard card to buy groceries. bit.ly/MW1GDB twitter.com/MasterCardNews…
- MasterCard Worldwide (@MasterCardNews) July 31, 2012

MasterCard says that the new system is dramatically reducing Sassa's operating costs. Until now, the agency has spent between R26 and R35 per grant to pay beneficiaries. Under the new agreement, disbursement costs will be capped at R16.50, enabling Sassa to save up to R3 billion ($375 million) in operating costs over the next five years.

Dries Zietsman, country manager, South Africa, MasterCard, says: "The early success of the project rollout affirms MasterCard's vision to create a world beyond cash, as electronic payments using Debit MasterCards opens up a world of financial inclusion for many South Africans who have previously not had access to banking products."

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Stanley Epstein - Citadel Advantage Ltd - Modiin | 01 August, 2012, 07:05

Why am I not surprised by this bit of “news”? Way back in the mid-1990s two major South African banks individually tried to steer the new South African government in exactly this direction, with no success. The more things change, the more they stay the same.

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 02 August, 2012, 14:53

Biometrics in the mid-90s? We have been seeing biometric ID projects limping along (e.g. Aadhar, India) or failing altogether (UK?) several years later. Maybe the earlier proposal in South Africa failed to take off because biometrics ID was not robust enough at the time? (Some may say that it still is not robust enough even today, but that's another topic.)

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