Grant recipients will no longer be able to withdraw cash from Post Offices, Postbank and South African Social Security Agency (Sassa) announced.
Postbank and Sassa said in a statement on Monday that they would phase out all physical cash payment points (CPPs), including the cash withdrawal of grants within Post Offices. The process will start in January next year and end on 31 March 2024.
The announcement was initially made in 2018 and forms part of a strategy to decrease cash-in-transit heists, unfavourable conditions at CPP sites, as well as capacity challenges faced at the Post Office.
"Post Office branches will continue to assist Sassa beneficiaries with non-cash payments such as card reinsurances, PIN resets, printing of statements, and other such non-cash services. What will be discontinued is only the payment of cash to beneficiaries. So, the Post Office branch services will continue but only for non-cash transactions," said PostBank spokesperson Bongani Diako.
The Post Office, currently in business rescue, has lost R6 billion in the past three years, including a R2.2 billion loss for the 2022/2023 financial year.
Last week, it was announced that it would be closing 420 loss-making branches and retrenching 6 000 of its 11 000 employees after most of its shareholders approved business rescue plans. The plan also includes a potential R3.8-billion bailout from the government.
With the closure of CPPs, grant recipients will be expected to use alternative National Payment System (NPS) channels by using their cards at retailers to pay for goods or withdraw using cash-back facilities. Alternatively, they will be able to withdraw cash from ATMs and retailers, Boxer, Pick n Pay, Spar, Shoprite, Usave, or Checkers.
According to Postbank and Sassa, 98% of grant recipients use various NPS channels and will not be affected by the shift.
"The transition will be implemented sensibly to ensure that no one is left out. The aim is to ensure continuity in the payments for everyone, and that every person is paid their grant in the most efficient, safe, secure, reliable and convenient manner," they said.
However, the plan to close CPPs has been criticised by the civil society organisation Black Sash.
"[The] decision was made without proper research and thorough investigation of how it will impact social grant recipients, especially pensioners and disabled people in rural areas," said Black Sash regional manager Evashnee Naidoo.
Naidoo said interviews with grant recipients showed a general dissatisfaction with the closure of CPPs, with some recipients arguing that the move would drive them deeper into poverty.
Recipients said the move to alternative NPS sites would mean increased transport costs, with some visiting payment sites more than once due to significant delays.
Earlier this year, News24 reported that thousands of South Africans were forced to wait in queues due to system glitches at ATMs and retailers.
Recipients also raised concerns about the withdrawal fees implemented at ATM facilities or retailers, ranging between R10 to R50.
According to Naidoo, more than 60% of recipients said they would need assistance at pay points, including ATMs, with some even asking security guards to assist them in withdrawing their grants.