A Tale of Two Payment Systems: Debt and the Social Welfare State

Over the past decade and a half the South African social grant payment system has changed several times -- but, debt has been part and parcel of each new system. Between 2012 and 2015, the South African Social Security Agency (SASSA) outsourced the payment of cash transfers to a private corporation, who compelled grantees to use their state entitlements as collateral for credit. Then, in 2017, the Black Sash filed an application with the Constitutional Court (ConCourt) to end this contract, and shift from an ostensibly 'private' service provider to an ostensibly 'public' one via the Post Office. From 2018-2022 the under-resourced, under-capacitated Post Office struggled to deliver grants, compelling people to use their state entitlements as collateral for credit, albeit in new ways. As such, this paper reflects on the assumption that 'the state' or 'the public' is a better solution to the private sector. Civil society initially assumed a state agency would necessarily be an antidote to a predatory private one. While one arm of the state, the Court, proved visionary and progressive in its judgments, another arm of the state, the Post Office, proved ineffective at implementing them due to years of austerity. This raises questions about the possibilities and limitations of romanticizing the state (particularly amid neoliberalism, state capture) and considers the types of interventions necessary to undo predatory financial capitalism.