TymeBank: Why we're taking on home affairs — The author, TymeBank chief commercial officer Cheslyn Jacobs

When the South African government introduced the social relief of distress (SRD) grant in 2020, it was more than a pandemic lifeline. It became a stress test for the country’s financial and digital infrastructure.

Millions of previously unbanked citizens suddenly needed a secure, reliable way to receive money.

Today more than 7.5 million people still receive the monthly, R370 grant. For TymeBank, serving these South Africans isn’t a short-term profit opportunity but a nation-building mandate. But doing so comes with real, rising costs.

SRD recipients are often young and unemployed, living in peri-urban or rural areas with limited access to formal financial services. They are not financially excluded by choice, but by circumstances. Besides not having a steady income, they may also be dealing with challenges, such as lack of proper documentation and poor digital literacy. Bringing them into the banking system is critical to achieving financial inclusion, digital transformation and long-term economic resilience.

Let’s follow Tsholofelo, a young woman with a diploma in human resources who hasn’t found work since graduating. She qualifies for an SRD grant and needs a bank account to receive it. She borrows R100 from her uncle to travel to her nearest Boxer store. At the TymeBank kiosk, she scans her fingerprints and walks away with an active bank account and personalised card – seamlessly and in minutes. But behind this smooth experience lies a complex, costly process.

KYC checks

Before issuing an account, banks must verify customer identity under Fica and anti-money laundering laws. This includes biometric and demographic verification against the department of home affairs’ national identity system. Currently, that verification costs 15c, which would cost the bank 30c for two lookups, making the total cost to onboard one SRD customer, including KYC (“know your customer”) checks, digital onboarding and card issuing, approximately R55. Home affairs has proposed raising the verification fee to R10 per real-time query, a 6 500% increase, which would hike the total cost of onboarding to R75/customer (including the R20 for two lookups).

SRD recipients often generate less than R50/year in revenue, leading to a negative unit margin. TymeBank already subsidises these accounts by not charging monthly or minimum fees. A R10 verification fee puts this model at risk.

Read: War of words erupts over home affairs database fee hike

If the bank onboarded a million SRD customers, home affairs verification costs alone would reach R20-million. This would make it unsustainable to serve the very people financial inclusion aims to help.

This sharp increase, driven entirely by the verification cost, adds financial strain to a segment already served at a loss, making financial inclusion significantly harder to sustain.

Batch verification

Home affairs offers a cheaper R1 option for overnight batch processing, but it isn’t practical. In Tsholo’s case, it would mean leaving the store without an account and returning another day after verification is processed – a significant barrier for someone who had to borrow taxi fare to get there in the first place.

For many SRD recipients, TymeBank is their first formal banking experience. That means:

Helping them use the account safely
Offering low-data or offline access
Providing support via call centres or in-person services

These are real, recurring costs that ensure customers don’t just open an account – they benefit from it.

The risk of doing nothing

Without accessible, affordable banking, SRD recipients will return to informal, cash-based systems. They’ll face higher costs, greater risk and have no way to build a financial track record – blocking access to credit, savings and upward mobility. The long-term result? Entrenched inequality and systemic exclusion.

Banking an SRD recipient is not a high-margin business. It’s a social contract. It requires thoughtful regulation, cooperative infrastructure and policy that removes, not raises, barriers.

That’s why TymeBank, and others, are raising concerns about the proposed fee hike. Because the real cost isn’t just R10 – it’s the cost of leaving millions behind.