Tyme Bank CEO Coenraad Jonker has strongly criticized the Department of Home Affairs’ decision to increase identity verification fees by a staggering 6,500%, warning that the move will force banks to either subsidize the costs or pass them on to customers—potentially making banking services unaffordable for millions of low-income South Africans, including SRD grant recipients.
In an open letter to Home Affairs Minister Dr. Leon Schreiber, Jonker argued that the fee hike—from R0.15 to R10 per verification—will undermine financial inclusion and digital transformation efforts. The increase, set to take effect on July 1, has sparked a fierce debate between the government and financial service providers reliant on real-time access to the National Population Register (NPR).
“A Regressive Tax on the Poor”
Jonker called the fee increase an “anti-poor policy,” stating that it places South Africa’s pricing among the most expensive in emerging markets—double the cost of similar services in Pakistan and far above global benchmarks like Peru.
“This is not how you fund public infrastructure. You don’t charge the poorest of the poor an exorbitant fee to fix a broken system,” Jonker said in an interview. He acknowledged Home Affairs’ system is flawed—often offline and unreliable—but insisted alternative funding mechanisms should be explored.
Costs to Banks and Customers
Tyme Bank estimates its monthly verification costs will surge from R130,000 to R13 million, forcing tough choices:
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Absorb the cost, hurting profitability and shareholder returns.
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Pass fees to customers, pricing out vulnerable groups like SRD grant recipients.
“We built a model to serve low-income customers profitably. If costs exceed what they can pay, the system collapses,” Jonker explained.
Minister’s Pushback
Minister Schreiber dismissed Tyme Bank’s concerns on social media, accusing the bank—valued at R26.7 billion—of refusing to pay its fair share while expecting taxpayers to subsidize its operations.
“The CEO of a ‘unicorn’ worth R26.7 billion demands struggling taxpayers subsidize it,” Schreiber posted on X, claiming Tyme Bank ignored official consultation letters—an allegation Jonker denies.
Industry Divide
While some traditional banks, like Capitec, say they’ll absorb the cost, Jonker argues their brick-and-mortar models are less reliant on real-time verifications than digital banks and fintechs. Retailers, telecoms, and lenders serving low-income markets also oppose the hike.
What’s Next?
With the deadline looming, Tyme Bank vows to keep lobbying for a compromise, suggesting a 10x increase (R1.50) as more sustainable. Jonker warns failure to revise the fee will harm financial inclusion: “Sanity must prevail. This isn’t about profits—it’s about serving South Africans affordably.”