The SmartSwitch solution was a biometrically-driven smart card system which utilised a nation-wide network of point of sale devices, all connected to a central switch which processed the transactions. Beneficiaries were issued a smart card containing personal details and fingerprints.
Each card has three “wallets”, one of which (the grant wallet) is used as the receptor wallet for the food grant. As per government’s instruction, the grant wallet could only be used to SPEND at very specific merchants. One of the other two wallets is used for cash deposits, cash withdrawals, money transfers and bill payments, while the second is an interest bearing savings wallet.
Since a minimum of two point of sale (PoS) devices were allocated per settlement, beneficiaries were afforded choice. No longer were beneficiaries to be provided with a pre-determined food basket. Beneficiaries were given the freedom to choose what they wished to buy with their food grants. Beneficiaries were no longer forced to collect their entire food rations on the first day of the month, but instead could now buy food as and when required. Beneficiaries were no longer beholden to a single supplier, and could purchase from any approved merchant anywhere in the country.
Merchants wishing to participate as food suppliers underwent a stringent assessment which included ensuring that the correct foodstuffs were sold. Merchants were provided with a free PoS device. This eliminated the need for annual tenders for food baskets; freed up social workers to perform much needed social work duties and did away with corruption around the annual award of tenders. Although 103 000 beneficiaries were expected to register, the deterrent of capturing finger-prints meant only 70,000 people presented themselves, resulting in significant savings for government.
Beneficiaries no longer suffered the indignity of having to queue up at the same time and offering the villagers a public spectacle. Beneficiaries could shop whenever they chose to. It soon became a source of pride for beneficiaries to go and shop and to “pay with plastic”. Dignity has been restored to the poorest of the poor. Where people would scuttle to collect food and attempt to hide from their neighbours, now they proudly do their shopping and present their cards with smiles on their faces.
Merchants now receive settlement for their sales within 48 hours of making the sale compared to the 30 to 60 days under the previous system. This has resulted in significant improved cash flow, enabling merchants to expand their stock levels, which in turn has provided more choice of foodstuffs for beneficiaries. Since merchants no longer have a hold over a set list of beneficiaries, there has been an increase in levels of service to beneficiaries and the unscrupulous practices of providing spoiled or expired foodstuffs have been eradicated.
It is now competition amongst merchants that drives customer service, ensuring that prices stay fair and that high quality goods are sold – poor service delivery results in the beneficiaries walking with their feet. Now that is true restoration of choice and of dignity.