TymeBank slams identity verification fee surge as 'regressive tax' on South Africans

Source: Pexels

The bank describes the move as a "crippling" blow to financial inclusion and digital progress in South Africa.

The bank warns that the increase—raising the cost per identity verification from just 50 cents to R33—will severely impact the ability of financial institutions to serve low-income populations, including social-grant recipients and informal workers.

“This is not just a policy shift—it’s a regressive tax on the most vulnerable South Africans,” said Coenraad Jonker, co-founder and chief executive officer of Tyme Group. “It undermines digital inclusion, weakens our ability to comply with anti-money laundering laws, and threatens progress toward exiting the FATF greylist.”

Identity verification services provided by the Department of Home Affairs are essential for compliant customer onboarding across the banking sector. TymeBank argues that the steep fee hike, introduced without proper industry consultation, jeopardises both innovation and regulatory compliance in the digital finance space.

Call for balance

The open letter calls on the President, the Minister of Finance, and the Reserve Bank Governor to intervene and pause the increase. Jonker clarifies that TymeBank does not oppose modernising the system or recovering costs but is urging a more balanced, performance-based approach.

“We’re proposing a phased, inflation-linked model that allows for predictability, protects access for underserved communities, and reflects actual service improvements,” he said. “Digital transformation should open doors, not close them.”

TymeBank called for an immediate halt to the fee increase, structured consultation with industry stakeholders, a transparent and sustainable pricing framework, and greater public-private collaboration to drive inclusive digital progress.