Sassa Extends Postbank’s Contract by Three Months

The South African Social Security Agency (Sassa) has extended its Master Services Agreement (MSA) with Postbank for an additional three months.

“This extension enables the executive authority to consider various issues between the two entities and provide necessary guidance,” said Sassa spokesperson Paseka Letsatsi on Wednesday. The contract was originally set to conclude on Tuesday, 30 September.

In December 2023, Sassa issued Postbank a six-month termination notice, citing a breakdown in their relations and reputational risks due to Postbank’s deficiencies. This notice was later revoked; however, in March 2024, Sassa provided a new 18-month termination notice scheduled to end on 30 September 2025.

Shortly before the contract was set to expire, Postbank filed an urgent application at the Gauteng High Court in Pretoria to prevent Sassa from terminating the MSA while awaiting a formal dispute resolution outcome. Judge Colleen Collis dismissed the case from the urgent roll, labeling the urgency as “self-created.”

Following this ruling, Postbank announced intentions to appeal to the Constitutional Court for urgent relief, claiming that Sassa was undermining the established dispute resolution process. Postbank noted that after several unsuccessful attempts to resolve the differences, it formally declared a dispute in July 2025 and suggested a meeting between the CEOs. Sassa, meanwhile, proposed to address the matter through an Inter-Ministerial Committee, but those discussions have yet to take place.

On Tuesday night, Postbank confirmed that the MSA would remain unchanged as they awaited discussions from the Committee.

The MSA, established in 2018, was designed to protect social grant beneficiaries’ accounts from bank fees and unauthorized deductions, which were common under the previous contractor. Through the MSA, Postbank recoups social grant transaction costs via payments from Sassa, thereby eliminating bank fees for beneficiaries.

Since 2020, the number of Postbank’s social grant customers (excluding R350 SRD grant recipients) has drastically fallen from 8 million to 2 million. This decline can be attributed to delayed payments and a problematic card swap process, prompting customers to switch to private banks.

In court documents, Postbank has warned that if the agreement is not maintained, it would need to impose monthly service fees on beneficiaries: R7 for account maintenance, R2 for balance inquiries, R14.56 for ATM cash withdrawals, R22 for a three-month bank statement, and R80 for a replacement card.

Commenting on the extension, Postbank CEO Nikki Mbengashe stated, “This provides certainty and assurance for millions of social grant beneficiaries, allowing them to confidently use their Postbank Black Cards and Sassa Gold Cards, ensuring uninterrupted access to their grants and related banking benefits.”

Meanwhile, Black Sash advocacy manager Hoodah Abrahams-Fayker raised concerns about the implications for social grant beneficiaries and emphasized the necessity for payments to proceed without interruption. This has been a recurring issue for recipients dependent on Postbank, as “Sassa indicated reasons for the termination,” Fayker pointed out.

She noted that Postbank has not yet presented its strategies to tackle these challenges. “Black Sash is worried that beneficiaries may be compelled to turn to private banks, where fees and charges are not subsidized. The ongoing difficulties with grant administration and payments are frequently borne by the beneficiaries,” said Abrahams-Fayker.

© 2025 GroundUp. This article was first published here.

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