Capitec CEO Gerrie Fourie says that the bank will absorb the cost of the 6,500% Online Verification System (OVS) fee hike, and that customers will be unaffected.<\/p>\n\n\n\n
In June, Home Affairs Minister Leon Schreiber said that the department would increase the cost to use the OVS from 1 July 2025.<\/p>\n\n\n\n
The system is used by various service providers, such as banks and insurers, to conduct real-time ID verification checks against the national population register.<\/p>\n\n\n\n
The system previously cost 15 cents per check. From Tuesday, 1 July, this fee has increased to R10, marking a 6,500% jump. There is also a new option for ‘offline’ bulk checks at R1 per field.<\/p>\n\n\n\n
Schreiber argued the fee increase was necessary because the 15-cent charge had always been \u201cinappropriately low\u201d and had not changed for more than 10 years.<\/p>\n\n\n\n
Meanwhile, the cost of maintaining and upgrading the system increased every year, leaving no way for the department to recover costs.<\/p>\n\n\n\n
Schreiber added that some clients often exploited the system by overloading it and causing downtime, pushing other clients onto privately owned verification systems that charged inflated fees.<\/p>\n\n\n\n
Despite this reasoning, the move drew fiery criticism from some clients.<\/p>\n\n\n\n
Coenraad Jonker, the CEO of Tyme Group, was notably outspoken about the move, saying the new structure would be detrimental and damaging to the entire banking industry.<\/p>\n\n\n\n
He argued that the increase to the fee would cripple businesses and would be a negative for banks serving vulnerable communities.<\/p>\n\n\n\n
\u201cThis is not just a policy shift\u2014it\u2019s a regressive tax on the most vulnerable South Africans,\u201d said Jonker.<\/p>\n\n\n\n
The group sent an open letter to Schreiber urging him to reverse the decision, asking President Cyril Ramaphosa, Finance Minister Enoch Godongwana, and Reserve Bank Governor Lesetja Kganyago to intervene.<\/p>\n\n\n\n
Schreiber did not respond well to the letter, questioning how a bank worth $1 billion would be unwilling to spend R10. He hit back at the bank for “shameless profiteering” over the cost of the OVS.<\/p>\n\n\n\n
However, TymeBank has since doubled down on its criticism, with its latest argument that the new fee will ultimately hurt the recipients of the R370 Social Relief and Distress (SRD) grant.<\/p>\n\n\n\n
It said these grant recipients often generate less than R50 per year in income, meaning TymeBank has to subsidise their accounts as it does not charge fees. <\/p>\n\n\n\n
While the bank argues that a R10 verification fee would make this model unviable, Schreiber has stated that it is not the government’s responsiblity to subsidise a multi-billion rand bank’s business model.<\/p>\n\n\n\n
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