TymeBank threatens legal action over 6,500% spike in ID verification fees

TymeBank, a digital banking unicorn, is preparing to sue the Department of Home Affairs over its decision to increase the price of real-time identity verifications by 6,500%. Coen Jonker, co-founder of TymeBank and now CEO of Tyme Group, had previously warned that the move would make South Africa one of the most expensive markets for this mandatory service.

Under government regulations, banks and telecom providers are required to verify customer identities against the National Population Register (NPR) to combat money laundering and other crimes. Until now, those checks cost as little as 15 cents each, but will now cost 10 rands. 

The cost of inclusion

Speaking today to TechCentral, TymeBank’s Chief Commercial Officer, Cheslyn Jacobs, outlined just how steep the impact will be. He explained that onboarding a Social Relief of Distress (SRD) recipient, who are often young and unemployed, with limited access to formal financial services, typically requires two identity checks: one for biometrics and another for demographic checks. At the current rate of 15c per check, the total verification cost is 30c, with overall onboarding, including KYC checks, digital processing, and card issuance, coming to approximately R55 per customer.

However, with the new R10 fee, Jacobs said those verification costs alone would increase to R20 (~$1) per person, pushing the total onboarding expenses to R75 (~$4). Spread across a million SRD sign-ups, the extra burden adds up to R20 million ($1.14 million), a cost Jacobs describes as impossible to absorb without compromising the bank’s mission.

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TymeBank has already published an open letter to Minister Leon Schreiber criticising the fee hike as “a crippling blow to financial inclusion and digital progress.” The bank stated that it had attempted to engage directly with the Department of Home Affairs but received no response.

MicroFinance South Africa, an association representing over 1,400 microfinance credit providers in the country, has also added to the pressure. CEO Leonie van Pletzen called for an immediate pause to the changes, warning that small, formal lenders are already struggling with outdated regulations and can no longer afford more compliance costs. “No credit provider, regardless of intent, can meet these obligations if the cost of compliance is structurally unaffordable,” she said.

This fee dispute sits within a broader digital agenda. In February, President Cyril Ramaphosa announced plans for e-passports, automated visa services, and wallet-style ID documents by 2030, with Home Affairs Minister Leon Schreiber describing the new verification service as the cornerstone of those ambitions.