- A legal challenge has been lodged against Home Affairs over the big fee increase it introduced on ID verification checks last year.
- The price of ID verification checks was increased by 6 500%, leading to a very public spat between TymeBank CEO Coen Jonker and Home Affairs Minister Leon Schreiber.
- Now, an industry body representing the biggest telecommunications companies in South Africa is taking Home Affairs to court over the matter.
- For more financial news, visit News24 Business.
The Association of Communications and Technology (ACT), which represents the biggest mobile network operators in South Africa, is taking Home Affairs to court over the big fee increase it imposed on ID verification checks last year.
In a statement issued on Tuesday, ACT said that it had initiated review proceedings to challenge the fee hike Home Affairs introduced on ID verification checks against the National Population Register.
In a statement reacting to the legal challenge, Carli van Wyk, spokesperson for the Minister of Home Affairs, defended the decision to hike the price of the service and said that Home Affairs welcomes the opportunity to expose how the system was previously exploited.
In June last year, Home Affairs minister Leon Schreiber said the entity would increase the price of performing a check against the register from R0.15 to R10 from July 2025. Under the new pricing schedule, companies can perform a batch of R1 verifications during off-peak hours.
Many companies need to perform these checks, especially when onboarding a customer or changing their plan, to confirm that someone is who they say they are.
This verification is also essential for compliance with rules like the Financial Intelligence Centre Act (FICA) and the Regulation of Interception of Communications Act (RICA).
Schreiber justified the price increase of more than 6 500% by arguing that there had been “extreme under-pricing” of the service, leading to overuse that overwhelmed the system and contributed to “system offline” failures.
He said that the service had been returning an error rate in excess of 50% when verification checks were performed.
Schreiber also said that the extraordinarily low fees had led to “under-investment” in the National Population Register, meaning the system posed a threat to financial inclusion and the government’s ability to combat financial crime.
‘Business case’ affected
At the time of the announcement, the strongest objection to the proposed fee increase came from TymeBank CEO Coenraad Jonker.
Jonker explained that for a bank like Tyme, which does not charge its customers anything to create an account and has no monthly fees, the verification fee hike materially changed the business case for onboarding a customer. He said that this meant there was a risk the company wouldn’t be able to sustain its model or would have to find a creative way to sidestep the checks.
He said that companies had to perform at least two verification checks during client onboarding, which would increase the bank’s onboarding cost for a customer from around R50 to between R70 and R80.
READ | ID-check fee hike may push banks, fintechs to sidestep Home Affairs, says Tyme CEO
“So if we then add the R20 to R30 for onboarding, plus maybe once or twice a year, for something else [that requires a verification check], that customer that was marginally profitable actually becomes quite unprofitable for us,” he told News24 at the time.
He said that off-peak checks were not a suitable alternative to real-time verification, as many processes must be conducted immediately.
Jonker agreed that National Population Register checks were highly dysfunctional.
Profit over public interest?
Schreiber blasted Jonker for speaking out against the fee hike, suggesting that TymeBank was putting profits over the public interest.
“Sadly, this belief that the public interest must be harmed to serve private interests is a reminder that the instinct behind state capture is more widespread than just one instance,” Schreiber said in a post on X.
READ | Schreiber blasts Tyme CEO for ‘state capture instinct’
Some other companies, notably Capitec, came out in support of the fee hike.
Jonker had suggested that Schreiber’s harsh put-down of his criticism may have prevented others opposed to the measure from speaking out.
And so, it would seem, he was right.
‘Absence of consultation’
In its release, ACT said that the review application it has lodged against the fee hike was served to Schreiber and the Minister of Communications and Digital Technology, Solly Malatsi, on 13 January 2026.
ACT’s members include Vodacom, MTN, Cell C, and Telkom, among others.
Nomvuyiso Batyi, the CEO of ACT, said there was an “absence of meaningful, transparent and inclusive public consultation” in the process, which departed from the principles of cooperative governance and accountability set out in the Constitution and the Promotion of Administrative Justice Act.
ACT indicated that it had made repeated requests for engagement and consultation with the department, but the decision was taken without proper engagement.
It said it would challenge the fee increase on grounds relating to the consultation process, the unjustified and disproportionate nature of the increase, its detrimental impact on several industries, and the lack of a transition period before implementation.
“ACT remains committed to constructive engagement with government and all stakeholders to ensure that regulatory decisions are made transparently, fairly, and in the best interests of South Africa’s digital future,” it said.
In the statement reacting to the legal challenge, Van Wyk repeated the argument that access to the system at the previous prices undermined Home Affairs’ ability to offer an effective service.
“Home Affairs welcomes the opportunity to now expose before the courts, in granular detail, how some users came to rely on unsustainably underpriced access to the personal information of South Africans to drive profits under the previous fee structure at public expense,” Van Wyk said.
She said that the new, upgraded system now reliably delivers results within seconds.
