Major South African bank sends urgent message to Ramaphosa
South African digital banking group TymeBank has sent an open letter to Minister of Home Affairs Leon Schreiber urging him to reverse the decision to hike verification fees by 6,500%.
The letter contains an urgent appeal to President Cyril Ramaphosa, the Minister of Finance Enoch Godongwana, and Reserve Bank Governor Lesetja Kganyago to intervene.
Schreiber announced this week that Home Affairs would be rolling out an updated online verification system (OVS) from 1 July 2025, which would come with a steep increase to the price of checks.
The OVS is used by various service providers, including banks and insurers, to conduct real-time ID verification checks against the national population register.
Under the current system, it costs a client 15 cents per check. From 1 July, this fee will increase significantly to R10, with an option for ‘offline’ bulk checks at R1 per field.
Schreiber said the fee increase was necessary because the current charge had always been “inappropriately low” and unchanged for more than a decade.
Meanwhile, the cost of maintaining and upgrading the system had constantly been increasing, with no way for the department to recover these costs, leading to technology stagnation.
The minister also accused clients of exploiting the system by overwhelming it and causing downtime, and then pushing clients onto their own verification systems that charged inflated fees.
While the DHA is now confident that the system can fulfil its purpose and that the fee structure is reflective and fair, industries that rely on cheap real-time checks are in for serious pain.
Coenraad Jonker, co-founder and chief executive of Tyme Group, said the new structure would be detrimental and damaging to the entire banking industry.
He said the increase to this fee will be crippling for the banking industry and will have huge consequences for those serving vulnerable communities.
The proposed pricing structure will make it commercially unviable to serve low-income South Africans, such as social grant recipients and informal workers, and will close the door on digital progress, he said.
“This is not just a policy shift—it’s a regressive tax on the most vulnerable South Africans,” said Jonker.
“It undermines the progress we’ve made toward digital inclusion, weakens the financial sector’s ability to comply with anti-money laundering laws, and risks reversing efforts to exit the FATF greylist.”
Finding another way
Jonker urged president Cyril Ramaphosa and the national government as a whole to step in and hit pause on the plan.
He wants the government to halt the implementation of the fee increase and re-engage with industry stakeholders to find a more transparent and sustainable path forward.
The new offline batch-processing option has also been rejected. While less expensive at R1 per field, the Tyme CEO said it is not a practical substitute for real-time data lookups.
“In the digital world, everything is real-time – account opening, card replacements, PIN resets and payments. Real-time is increasingly important for customer service and for the safety and security of customers,” he said.
He argued that if look-ups are not real-time, customers would incur additional costs because they would need to take at least two trips to open an account.
“These are costs that cannot be absorbed or mitigated by banks,” he said. Old generation or ‘legacy’ banks still run many overnight batch processes, but this is the problem.
“By charging R10 for real-time and R1 for batch processing, the DHA is essentially providing the incumbents with a 90% discount while punishing new digital competitors and their customers with unsustainable pricing,” Jonker said.
“This is patently anti-competitive” and akin to sabotaging digital transformation and financial inclusion, he added.
Jonker said that TymeBank is not opposing system upgrades or cost recovery, but wants a “phased, performance-linked” model to be used that protects financial access for underserved communities.
This would include volume-based pricing and a cost recovery model linked to performance and inflation.
Importantly, he said there should be reasonable notice periods that allow institutions to plan and budget accordingly.
Home Affairs originally published the fee change in March 2025, intending for the change to take effect from April 2025, but this was withdrawn and re-gazetted with a 30-day public comment period.
The new gazette with the official changes was only published this week, with around only two weeks’ notice to clients before implementation on 1 July.
“Digital transformation and financial inclusion are not luxuries. They are the backbone of a modern, just society,” he said.
“The government cannot afford to raise barriers where it should be opening doors. We must not allow our digital future to be held hostage by short-sighted policy.”
The full open letter can be read below:
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