TymeBank founder warns minister about fee increase for ID verification

TymeBank founder Coenraad Jonker has warned Minister of Home Affairs, Leon Schreiber, in an open letter that he should reverse his decision to increase the fee for accessing identity verification services.

Jonker, who is also CEO of TymeBank, writes that he is not speaking up only as co-founder of TymeBank but also as a citizen “deeply committed to the prosperity and digital advancement of our country”. Schreiber recently gazetted an increase in the fee for accessing identity verification services by what Jonker calls “an unfathomable 6,500%”.

He warns that this will unravel years of progress in digital transformation, financial inclusion and economic justice.

“Today, South Africa is one of the most inclusively priced countries in the world, comparing well with Panama, Colombia and Peru, at 2 US cents per identity lookup. Your new fee makes South Africa almost twice as expensive as the most expensive peer group countries, like Pakistan and Ecuador.”

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Price increase for ID verification will rob poor of free bank account

Jonker uses TymeBank as an example to illustrate the impact of this increase. “We serve 11 million South Africans, and many of them are social grant recipients and informal earners. Under your current fee structure, TymeBank can provide the poorest South Africans with an account in real-time with no monthly fees.

“Your new fee will make this impossible, robbing South Africa of its only accessible and free bank account.”

Jonker calls it an anti-poor policy decision and says it is in all our interests that the verification system, which plays a foundational role in enabling trusted digital identity services, be both sustainable and accessible.

However, he says, Schreiber’s decision shifts the cost of what should be a state-funded utility onto the shoulders of the poor. “It imposes a regressive tax that penalises those with the least.

“Identity verification is a public good. Around the world, it is subsidised or fully funded due to its essential role in national development. Yet here, in a time when our country most needs inclusivity, innovation and trust, we choose exclusion.

“As my example illustrates, the price hike is wildly out of line with the average cost per user compared to South Africa’s peer group countries.”

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Current ID verification system down 50% of the time

Jonker says TymeBank fully supports the intention to build a better system, as it is down 50% of the time. “As we understand it, you now propose an exorbitant price increase on 1 July 2025, without delivering a system improvement.

“Therefore, instead of first fixing what is broken, your department proposes to abruptly increase fees for a failing service. This is not how public infrastructure should function. Essential digital services must be reliable, affordable and accessible. Anything less is a betrayal of the trust South Africans place in their government.”

He says the minister’s proposed new batch-processing option is not a practical substitute for real-time data lookups, although it is less expensive at R1.00 per field. “In the digital world, everything is real-time with account opening, card replacements, PIN resets and payments.

“Real-time is increasingly important for customer service and for the safety and security of customers. If lookups, for example, are not real-time, customers would incur additional costs because they would have to take at least two trips to open an account. These are costs that banks cannot absorb or mitigate.”

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Increase in ID verification fee on institutions offer inclusion in formal banking

Jonker says the 6.500% increase is not merely unworkable but existential as it places an untenable financial burden on institutions built to serve those who have long been excluded from the formal banking system.

He says this move flies in the face of global best practices and points out that the World Bank outlines three pillars essential for financial inclusion, namely an accessible, affordable biometric identity database, free or near-free real-time payments infrastructure and an open banking system empowering citizens with control over their data.

“For a variety of reasons, South Africa is underperforming on all three. The decision that has now been made takes us in the wrong direction, undermines the goals of our own.”

He points out that this also jeopardises the fight against grey listing and asks how banks and fintechs can meet their legal obligations when the cost of compliance is prohibitively high.

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TymeBank proposal for ID verification system

Jonker says TymeBank proposes:

• A consultative process with all key stakeholders, including the fintech and retail industries
• A phased fee structure
• Volume-based pricing
• A cost recovery model linked to performance and inflation
• Reasonable notice periods that allow institutions to plan and budget accordingly
• Prioritising the shared public-private responsibility to safeguard South Africa’s identity ecosystem and financial inclusion
• Ban the bad actors from accessing the system.

Jonker emphasises that digital transformation and financial inclusion are not luxuries but the backbone of a modern, just society. “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.”