The South African Social Security Agency (SASSA) has confirmed it will not renew its Master Service Agreement (MSA) with Postbank, which is set to expire on 30 September 2025.

This decision raises questions about the future of grant payments for over 2 million beneficiaries who currently use Postbank accounts.

Democratic Alliance Member of Parliament (MP)  Alexandra Abrahams submitted a parliamentary question to the Minister of Social Development, Nokuzola Tolashe, seeking clarity on the reasons behind SASSA’s decision, plans to mitigate any negative impact on beneficiaries, and whether a new payment service provider has been appointed to handle grant payments from 1 October 2025.

In her parliamentary reply, Tolashe stated that SASSA had “decided to exercise the exit clause of the Master Service Agreement (MSA) with Postbank due to operational reasons and changes within the payment environment.”

She explained that since the termination of cash pay points and over-the-counter services at South African Post Office (SAPO) branches, and the removal of SAPO as a recognised grant payment channel, the agreement with Postbank “no longer has any significant relevance.”

IOL previously reported that grant recipients faced repeated payment delays and technical glitches under Postbank’s systems, sparking widespread criticism and demands for reform.

Despite ending the formal contract with Postbank, Minister Tolashe assured beneficiaries that grant payments would continue without interruption.

“Postbank will remain fully operational as a licensed financial institution and will continue to offer standard banking services, similar to any other bank in the country,” she said.

Beneficiaries who hold Postbank accounts will still receive their grants and can access them using the same channels they are familiar with, said Tolashe. 

“SASSA is merely terminating its contractual relationship with the bank, but will continue to have an ongoing relationship with the bank as it does with other banks where social grant beneficiaries bank,” she said.

Tolashe added that beneficiaries wishing to switch to another bank would still be supported through existing processes.

Responding to Abrahams’ question about a replacement service provider, Tolashe made it clear that “no new service provider has been appointed.”

She stated that “all clients are currently paid by SASSA directly into their bank of choice, therefore eliminating the need to appoint a service provider for this function.” As a result, further questions about the name or cost of a new service provider were “not applicable.”

hope.ntanzi@iol.co.za 

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