Listed company, Net1 UEPS Technologies, a provider of alternative payment systems, through its subsidiary, Cash Paymaster Services (CPS), was awarded a R10 billion contract by the SA Social Security Agency (Sassa) in January 2012.
However, rival bidder AllPay claimed the process to be illegal and invalid citing corruption.
In August 2012, the North Gauteng High Court ruled that the tender process for the Sassa contract was improper, after AllPay voiced its concerns about the process.
At the end of March 2013, Net1 said that a full bench of the South African Supreme Court of Appeal unanimously ruled that the tender process followed by Sassa in awarding a contract to CPS was valid and legal.
In April, AllPay filed leave to appeal with the South African Constitutional Court against the judgment handed down in March.
Last week (30 July), in reporting interim results for the period June 2013, Absa said of AllPay: “The business continues to be wound down following the loss of the social grant payment contract in early 2012.”
The bank declined to comment any further, noting that it is subject to the Constitutional Court appeal.
“AllPay has appealed the decision of the Supreme Court to uphold the awarding of the social grants contract to another party. This appeal is scheduled to be heard in the Constitutional Court in the second half of the year (September),” Absa said.
AllPay weighed on Absa’s interim headline earnings accounting for a percentage loss of 0.8%, compared to a 2.8% positive contribution in June 2012.
AllPay accounted for 1.3% of Absa’s overall revenue in the 2012 reporting period.
Retail Banking’s net fee and commission income declined 3% to R5.1 billion, reflecting changing customer behaviour, price changes, customer attrition and AllPay’s lower contribution, the bank said.
The group saw a decline in transactional customer numbers from 9.7 million to 9.4 million during the reporting period.