Net 1 UEPS Technologies Inc.

Net 1 UEPS Technologies Inc.

March 27, 2009 09:17 ET

Net1 Announces 12 Month Contract with SASSA

JOHANNESBURG, SOUTH AFRICA--(Marketwire - March 27, 2009) - Net 1 UEPS Technologies Inc. ("Net1" or the "Company") (NASDAQ:UEPS)(JSE:NT1) today announced that it has agreed the terms of a one year contract with the South African Social Security Agency ("SASSA") for the payment of social welfare grants in the five provinces where it currently provides a grant payment service. The current service level agreements ("SLAs") will automatically terminate on March 31, 2009. The new contract will commence on April 1, 2009 and expire on March 31, 2010.

SASSA has received special approval from the South African National Treasury Department to conclude new agreements with the current service providers for a twelve month period without conducting a tender process. SASSA has indicated that a new tender process will be initiated during the next twelve months.

The Company and SASSA have agreed on a standard pricing formula based on a transaction fee per beneficiary paid, calculated on a guaranteed minimum number of beneficiaries. In addition, SASSA will assume responsibility for the pre-funding of all social welfare grants with effect from the May 2009 pay cycle.

Serge Belamant, Chairman and CEO of Net1, said "We are satisfied with the new contract terms as the combination of the dilutive effects that arise from the standardized pricing, the savings which are achievable by Net1 as a result of these changes and the resultant business opportunities that open up for Net1 are likely to lead to a financial outcome consistent with our existing business plan for the year."

About Net1 (

Net1 provides its universal electronic payment system, or UEPS, as an alternative payment system for the unbanked and under-banked populations of developing economies. The Company believes that it is the first company worldwide to implement a system that can enable the estimated four billion people who generally have limited or no access to a bank account to enter affordably into electronic transactions with each other, government agencies, employers, merchants and other financial service providers. To accomplish this, the Company has developed and deployed the UEPS. This system uses secure smart cards that operate in real-time but offline, unlike traditional payment systems offered by major banking institutions that require immediate access through a communications network to a centralized computer. This offline capability means that users of Net1's system can enter into transactions at any time with other cardholders in even the most remote areas so long as a portable offline smart card reader is available. In addition to payments and purchases, Net1's system can be used for banking, health care management, international money transfers, voting and identification.

The Company also focuses on the development and provision of secure transaction technology, solutions and services. The Company's core competencies around secure online transaction processing, cryptography and integrated circuit card (chip/smart card) technologies are principally applied to electronic commerce transactions in the telecommunications, banking, retail, petroleum and utilities market sectors. These technologies form the cornerstones of the "trusted transactions" environment of Prism, a South Africa-based subsidiary of the Company, and provide the Company with the building blocks for developing secure end-to-end payment solutions.

In late August 2008, Net1 acquired 80.1% of BGS Smartcard System AG ("BGS"), an Austrian company, whose core business consists of developing and integrating smart card-based offline and online financial transaction systems. Since 1993, BGS has implemented tailor-made smart card-based payment solutions, focusing on emerging economies and in cooperation with banks, enterprises and government authorities. BGS is headquartered in Vienna, Austria, and has subsidiaries in India and Russia, and a branch office in the Ukraine. Distributors are located in Asia, Central and South America, the Commonwealth of Independent States and the Middle East.

Forward-Looking Statements

This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that could cause the Company's actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.

4th Floor, North Wing,
President Place, Cnr. Jan Smuts Avenue and Bolton Road
Rosebank, Johannesburg, South Africa
Tel: 011-27-11-343-2000 Fax: 011-27-11-880-7080

Contact Information

  • Net 1 UEPS Technologies Inc.
    William Espley
    Investor Relations
    (604) 484-8750 or Toll Free: 1-866-412-NET1 (6381)