Home affairs under fire - Coen Jonker TymeBank — Tyme Group CEO Coenraad Jonker

Pressure is mounting on the minister of home affairs over a decision to impose huge increases in the fees for companies wanting to run checks against a national database for client verification.

The move, which has already drawn fire from the telecommunications industry, has now been harshly criticised by Coen Jonker, co-founder of digital bank TymeBank, who has voiced his unhappiness in an open letter to the minister, Leon Schreiber. But Schreiber has hit back at Jonker, calling his letter “faux outrage” and accused TymeBank of “profiteering over people”.

Home affairs has said that from 1 July — next week — it would begin the roll-out of an upgraded National Population Register (NPR) verification service to all companies and government users to verify identities with “first-class speed and reliability”.

“⁠For more than a decade, banks and financial service providers have only paid 15c for real-time verifications against the NPR. This is below market-related rates charged by the private sector for comparable services and far below the cost to the state of providing the online verification service, which deprived home affairs of the resources required to maintain the NPR,” home affairs said.

“Extreme under-pricing has led to profiteering and abuses by some users that overwhelm the NPR and cause failure rates of more than 50%, contributing to ‘system offline’ failures at home affairs offices and threatening national security.”

Jonker’s letter, in which he has decried what he described as the “catastrophic 6 500% indemnity verification fee hike”, comes just a day after Schreiber moved to defend the increases, saying they were necessary to ensure system stability and to stop “abuse”.

‘Crippling blow’

“This decision threatens financial inclusion, digital transformation and national compliance efforts,” said Jonker in a statement shared with TechCentral on Tuesday. “The move is a crippling blow to financial inclusion and digital progress in South Africa.

“This is not just a policy shift – it’s a regressive tax on the most vulnerable South Africans. It undermines the progress we’ve made towards digital inclusion, weakens the financial sector’s ability to comply with anti-money laundering laws and risks reversing efforts to exit the Financial Action Task Force (FATF) grey list,” he wrote to Schreiber.

He warned that the proposed pricing structure will make it commercially unviable to serve low-income South Africans, such as social grant recipients and informal workers.

“TymeBank is calling on national leadership, including the president, the minister of finance and the Reserve Bank governor to intervene,” TymeBank said in the statement. “The open letter urges the department to halt implementation of the fee increase and re-engage with industry stakeholders to find a more transparent and sustainable path forward.”

“We are calling for a phased, performance-linked model that enables planning and protects financial access for underserved communities. This decision puts the department on the wrong side of history. Digital transformation should open doors, not close them,” said Jonker.

Specifically, TymeBank has said it wants:

A halt to the proposed fee increase in its current form;
Structured consultation with the industry, including fintech players;
A transparent, inflation-indexed and performance-based pricing model; and
Real collaboration between the public and private sectors to drive inclusive digital progress.

TymeBank’s open letter to Schreiber follows scathing criticism of home affairs by the Association of Comms & Technology (ACT), an industry body that represents South Africa’s six biggest telecommunications operators, including Cell C, MTN, Telkom and Vodacom. ACT said its members were not adequately consulted regarding the price hikes.

“Home affairs must perform their due diligence and not increase prices so drastically overnight,” ACT CEO Nomvuyiso Batyi said in a recent interview with TechCentral.

But Schreiber has said the price increases are needed to help the department build a “world-class identity verification service”.

“⁠After initiating substantial upgrades to the service, home affairs has gazetted a new price structure that sets a cost-reflective price for real-time verifications during peak hours at R10, while introducing an off-peak, low-cost alternative for batch transactions costing just R1,” the minister said.

“This vastly enhanced service, which will boost service delivery from government departments and enhance financial inclusion in the private sector, will be accompanied by appropriate tariff increases implemented after widespread public consultation and after concurrence was obtained from the minister of finance.

“Since its roll-out more than a decade ago at inappropriately low cost to users, the demands on the online verification service have far outstripped the capacity at which it was originally designed,” Schreiber said.

‘Vicious cycle’

Home affairs accused “certain private sector users” of relying on the “artificially low price to inflate their corporate profits at the expense of the quality of service received by the public”.

“The artificially low pricing structure has led to such severe underinvestment in the NPR that it now poses a direct threat to financial inclusion, to the ability of the government to combat identity and financial crime, and to national security,” home affairs said. “Home affairs is bringing an end to this vicious cycle.”

“Shocking” is the fact that you paid a measly 15 cents for years – relying on taxpayers to subsidise the rest of the actual cost while you profited.

“Shocking” is that we have your CEO admitting, in writing, that he never even read our letter inviting public comment, then… https://t.co/0OeY6qxG9B

— Leon Schreiber (@Leon_Schreib) June 24, 2025

In a post on X, after this article was published, Schreiber hit back hard at Jonker, saying it was “shocking” that TymeBank was paying a “measly 15c for years, relying on taxpayers to subsidise the rest of the actual cost while you profited”. The minister posted that Jonker should take his “faux outrage somewhere else and stop putting profiteering over people”.

Dear minister,

I write to you not only as co-founder of TymeBank, South Africa’s first fully digital bank, but as a citizen deeply committed to the prosperity and digital advancement of our country. Your recent decision to gazette an increase in the fee for accessing identity verification services by an unfathomable 6 500% 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, Columbia and Peru, at US$0.02 per identity lookup. Your new fee makes South Africa almost twice as expensive as the most expensive peer group countries, like Pakistan and Ecuador.

Let me use TymeBank as an example to illustrate the impact of this. We serve 11 million South Africans, many of whom are social grant recipients and informal earners. Under your current fee structure, TymeBank is able to 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.

It is in all our interests that the department of home affairs (DHA) verification system, which plays a foundational role in enabling trusted digital identity services, be both sustainable and accessible. Your 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 because of its essential role in national development. Yet here, in a time when our country most needs inclusivity, innovation and trust, we are choosing exclusion. As illustrated above, the DHA’s price hike is wildly out of line with the average cost per user relative to South Africa’s peer-group countries.

TymeBank fully supports the intention to build a better system. By your own admission the system is down 50% of the time. As we understand it, you are now proposing an exorbitant price increase on 1 July 2025, without delivering a system improvement. So, 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.

You propose a new batch-processing option. While less expensive (R1/field), it is not a practical substitute for real-time data lookups. In the digital world, everything is real time – account opening, card replacements, Pin resets and payments. Real time is increasingly important for customer service and for the safety and security of customers.

In TymeBank, and in the best fintechs worldwide, almost everything is real time – and for good cause. As an example, if lookups are not real time, customers would incur additional costs because they would need to take at least two trips to open an account. These are costs that cannot be absorbed or mitigated by banks.

It is true that old-generation banks still run many overnight batch processes. And this is exactly the problem. By charging R10 for real-time and R1 for batch processing, the DHA is essentially providing the incumbents with a 90% discount while punishing new digital competitors and their customers with unsustainable pricing. This is patently anticompetitive.

The 6 500% increase is not merely unworkable, it is existential. It places an untenable financial burden on institutions that, like ours, are built to serve those who have long been excluded from the formal banking system. We did not sit idly by during your consultation process. We engaged in good faith, contributing through our industry body Sabric. However, the decision you have taken suggests our concerns were dismissed. As this decision has been gazetted and there is apparently no willingness from your department to engage, we are left with no choice but to speak directly to the public we both serve.

Your move flies in the face of global best practice. The World Bank outlines three pillars essential for financial inclusion:

An accessible, affordable biometric identity database
Free or near-free real-time payments infrastructure
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 National Development Plan and contradicts your own history of forward-thinking leadership.

Let us also not forget that South Africa was grey-listed in 2023 for deficiencies in our anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. Since then, the financial sector has worked hard to address these shortcomings. Access to the DHA identity verification services is vital for compliance with Fica, KYC, and AML/CFT standards. This price hike threatens that progress and weakens our collective effort to exit the grey list.

How can banks and fintechs meet their legal obligations when the cost of compliance is prohibitively high? This decision forces institutions towards unverified data sources in a bid to survive, undermining the integrity of our financial system and opening the door to increased fraud and risk.

TymeBank has always stood ready to partner with government to build a more digitally inclusive society. We are not opposing transformation but are calling for responsible, transparent change. TymeBank has reached out to the minister of home affairs to request a meeting, with the aim of engaging constructively and finding common ground on a policy that affects millions of South Africans.

We propose:

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
Prioritisation of the shared public-private responsibility to safeguard South Africa’s identity ecosystem and financial inclusion
Ban the bad actors from accessing the system

This is not an unreasonable ask. It is a call for fairness. Minister, this decision places your department on the wrong side of history and we call on the president, the minister of finance, the governor of the Reserve Bank, the CEO of the Prudential Authority and to every South African who believes in justice to urge you back to a path of progress.

We urge you to halt this fee increase immediately and return to the table for constructive, transparent dialogue. We must find a solution that secures the integrity of the DHA’s systems while protecting the dignity and rights of the people.

Digital transformation and financial inclusion are not luxuries. They are the backbone of a modern, just society. The 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.

We remain committed to continued collaboration and open dialogue. Let us be bold. Let us be visionary. Let us work together to build a South Africa that leaves no one behind.

Sincerely,

Coenraad Jonker
Founder and CEO, Tyme Group