MasterCard's biometric security venture with the South African Social Security Agency has helped the agency distribute more than 10 million active MasterCard debit cards throughout the country.
The biometric card was launched in March, 2012 to cut down on fraudulent grant applications and collections.
The system also reduces the agency's administration costs by distributing payments electronically. Since the agency introduced the system, just less than 22 million social grant beneficiaries have re-registered.
Global semiconductor provider Infineon Technologies supplies the security chips for the EMV chip-based card. Infineon's application includes asymmetric data encryption that enables secure storage of data and identification of the cardholder by fingerprints, voice and other personal information.
The biometric card has proven effective in cutting down on fraud because the approved beneficiary cardholder is the only person who can initiate a transaction, the agency states in a press release.
"By simply moving all grant payments from largely cash payments, which were costly, cumbersome and riddled with inefficiencies, to electronic payments, the new system has already saved SASSA a considerable amount in grant administration costs," MasterCard said in a prepared statement.
As part of the re-registration process, the agency opens free bank accounts for recipients at Grindrod Bank.
Recipients can deposit funds into their bank accounts through electronic funds transfers or third-party bank transfers, as well as use their cards to make purchases, check account balances, and withdraw cash at till points without incurring transaction charges at some South African retailers, the agency says.
Recipients can also withdraw cash at any ATM, but must pay transaction charges to do so.
Cash Paymaster Services, which received the agency's grant disbursement contract, reported a year ago that 2.5 million cards had been issued through July of 2012.