Net1 Files for Declaratory Order With South African High Court to Provide Certainty on Interpretation of Recent Regulations Adopted Under the Social Assistance Act

JOHANNESBURG, SOUTH AFRICA--(Marketwired - June 03, 2016) - Net 1 UEPS Technologies, Inc. ("Net1" or the "Company") (NASDAQ: UEPS) (JSE: NT1) today announced that it has filed for a declaratory order with the High Court of the Republic of South Africa Gauteng Division, Pretoria, to provide certainty to the Company, as well as other industry stakeholders, on the interpretation of the Social Assistance Act of 2004 (the "Act") and recent Regulations promulgated in terms thereof (the "Regulations"). The Regulations limit direct deductions from social grants paid to beneficiaries. The Company interprets the meaning of the word "deductions" to be specific to the practice of collecting life insurance premiums from grants, before the grants are paid to social welfare beneficiaries' bank accounts, and is of the opinion that the legislature did not intend to curtail the right of beneficiaries to transact freely once the money is deposited into their bank accounts.

Currently, grant beneficiaries effect more than 15 million debit transactions per month, involving more than 1,300 financial services and product providers. According to SASSA's statistics, 18,800 transactions were disputed during the 2015/16 fiscal year, which is far below the 0.5% industry benchmark for disputed transactions and represent less than 0.01% of all debit transactions processed during the period.

However, SASSA seeks to lend a broader interpretation to the meaning of the term "deductions" to incorporate any debit orders, EFT debits, purchase transactions, or fund transfers that are effected after the transfer of social grants to beneficiaries' bank accounts. If SASSA's interpretation were to prevail, debit transactions could no longer be used as a method for beneficiaries to make regular payments for financial services such as insurance premiums, loan re-payments, cell phone contracts, money transfers or any other recurring payments. The Company believes that forcing beneficiaries to pay for these products or services in cash would be a major setback to the national objective of financial inclusiveness, introduce financial and security risks for beneficiaries and result in significant price increases for these products and services.