TymeBank CEO Karl Westvig has sharply criticized the South African Department of Home Affairs’ (DHA) decision to significantly increase fees for identity verification services used by financial institutions, warning that the higher costs could threaten efforts to keep banking affordable and accessible for millions of South Africans.
Under a new tariff schedule published on June 23, 2025, the DHA raised the cost for real-time identity verifications from R0.15 to R10 per lookup, an increase of 6,567 percent. The department also introduced a separate rate of R1 per transaction for off-peak batch queries, which financial institutions can use to reduce costs for some operations. The fees affect banks and other businesses that depend on DHA’s National Population Register for know-your-customer (KYC) compliance, fraud prevention, and regulatory reporting.
Industry Backlash and Disputed Consultation
“We want this resolved properly,” Westvig said in a statement reported by the Daily Maverick. He added that the stakes extend far beyond TymeBank and affect the entire financial sector and millions of customers relying on affordable banking services. TymeBank’s co-founder, Coen Jonker, described the fee hike as “a regressive tax on the poor,” reflecting industry concerns that the cost increase could hit low-income customers the hardest.
Westvig also criticized the process behind the decision, stating that there had been no meaningful engagement with the financial sector before the new fees were introduced. However, the Department of Home Affairs maintains that it conducted a public consultation process and secured National Treasury’s concurrence before publishing the revised tariffs. This difference in accounts has become a flashpoint between the government and financial industry leaders who argue that the abrupt cost spike threatens financial inclusion goals.
TymeBank, which serves over 11 million customers through a mix of digital platforms and more than 1,300 partner outlets, has built its business around low-cost banking. The bank’s parent company, Tyme Group, achieved unicorn status in December 2024 after closing a $250 million Series D funding round led by Nubank, valuing the group at $1.5 billion.
Government’s Rationale and Sector Concerns
The DHA has defended the new fee structure, saying that the long-standing rate of R0.15 per real-time verification was unsustainable and prevented adequate investment in the National Population Register’s IT infrastructure. Officials claim that more than 50 percent of transactions have failed recently due to outdated systems, and that modernizing identity services is also essential for helping South Africa meet international standards as it works to exit the Financial Action Task Force (FATF) grey list.
Industry observers have warned that the sudden cost increase could hamper South Africa’s financial sector modernization, particularly as digital banking expands. The move comes at a time when companies like Mastercard are partnering with local firms to enhance digital identity verification processes across the continent, highlighting a broader shift toward more accessible digital services. Banking representatives continue to call for urgent dialogue with the DHA to negotiate a solution that balances security and compliance with the goal of financial inclusion.
Sources: Daily Maverick, PressPortal
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By Cass Kennedy
