Cash Paymaster Services, a Net1 UEPS Technologies Inc. subsidiary, has issued 2.5 million chip-based debit MasterCards backed by biometric security to social grant recipients across South Africa since March, according to MasterCard.

Johannesburg-based Cash Paymaster secured the social grant disbursement contract in January.

Net1 and Grindrod Bank, in association with the South African Social Security Agency, are issuing the EMV/UEPS debit MasterCards, MasterCard said in a July 30 press release.

The agency controls and manages the disbursement of 15 million social benefits to 9.2 million beneficiaries, who receive one or more of seven different social security grants available in South Africa on a monthly basis. These include the State Old Age Pension, War Veteran Grant, Disability Grant, Child Support Grant, Foster Child Grant, Grant-in-aid and Care Dependency Grant.

Provided by Net1, the smart card's biometric function identifies social-grant recipients using specific identifiers, such as scanned fingerprints for in-person deposits of grant funds at kiosks and voice recognition for phone-based deposits, Dries Zietsman, country manager for MasterCard, said in an interview. That way, no person other than the approved beneficiary may use the payment cards to collect their grant funds.

Spending on social grants will grow to 122 billion rand ($15.25 billion) in fiscal 2015 from 105 billion rand in fiscal 2013, MasterCard said in the release, citing the 2012 South African Budget Review.

MasterCard expects the total number of debit MasterCards issued to support the program to increase to a range of 5 million to 6 million by the end of the year, Zietsman says.

Recipients may use their agency MasterCard debit cards to pay for goods anywhere MasterCard is accepted and to check their account balances for free. They also may withdraw cash at ATMs and till points for an "affordable charge" at several participating retail outlets, the release notes.

The new system will reduce the operating costs for the agency, which traditionally has paid between 26 rand and 35 rand per grant to pay beneficiaries. Under the new agreement, disbursement costs are capped at 16.5 rand per payment, enabling the agency to save up to 3 billion rand in operating costs over the next five years, according to the release.

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