TymeBank warning about digital bank costs in South Africa

TymeBank CEO Coenraad Jonker says digital banks using real-time processes will bear the brunt of the Home Affairs’ pricing for the new National Population Register (NPR) online verification service.

Speaking to Newzroom Afrika, Jonker explained that “old economy” players like Capitec are far less sensitive to the changes surrounding real-time processes.

“Different players use these systems in different ways, and it has different impacts for us and for other people like retailers and other fintechs,” said Jonker.

“What really matters is the cost of the real-time payments rail. We’re a digital player. All of our processes are real-time.”

He explained that customers open TymeBank accounts on their phone or via a kiosk, which takes roughly three minutes. At kiosks, people opening TymeBank accounts will immediately receive their debit cards.

“The reason we can do that is we have this real-time service,” said Jonker.

“A player like Capitec is an old economy player. They are a lot less sensitive to these real-time requirements with their branch systems and so on.”

TymeBank sent an open letter to Home Affairs Minister Leon Schreiber slamming his department’s decision to charge more to use the new NPR online verification service.

On 24 May 2025, the Department of Home Affairs announced its plans to roll out the upgraded verification service to all companies and government users from 1 July 2025.

TymeBank asked the department to urgently reverse the decision to enforce a 6,500% increase in identity verification fees from 1 July.

It described the decision as a “crippling” blow to financial inclusion and digital progress in South Africa. Schreiber responded to TymeBank’s letter the next day, saying the higher prices are justified.

His department said it had observed instances of excessive use by certain institutions, which it attributed to the previously unsustainable low prices charged for the verification service.

“The CEO of a Unicorn worth R26,700,000,000 demands that taxpayers struggling to afford food must subsidise it,” said Schreiber

He said this was because TymeBank refuses to pay more than 15 cents for a service that costs substantially more to provide. He also said it contributed to system downtime at Home Affairs offices.

“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,” Schreiber told TymeBank.

“Shocking is that we have your CEO admitting, in writing, that he never even read our letter inviting public comment.”

Significant improvements

Home Affairs said its new online verification system (OVS) is a substantial improvement over the older version, enabling real-time verification with a failure rate of under 1%.

It also introduces an option for companies and government users to conduct “non-live batch verifications” during off-peak hours. This is done for a substantially lower fee than real-time verifications.

However, it’s important to note that the off-peak service is still much more expensive than the earlier price of R0.15 per verification.

From 1 July 2025, each real-time verification check will cost R10 per transaction, while non-live batch service requests are charged at R1 each.

“This cost is appropriate for the service provided and is not unreasonable when viewed against the costs charged to clients of the organisations utilising the OVS,” Home Affairs said.

Schreiber described the matter as one of national security. This is because every responsible state must ensure a functional population register.

Moreover, he added that a healthy NPR is a requirement for a functional digital ID system, one of Home Affairs’ strategic priorities over the next five years.

Schreiber said the NPR must become South Africa’s central database against which identities are verified as Home Affairs shifts to a digital-first department.

“This investment in the NPR is an investment in national security, in financial inclusion, and in the value of our cherished South African identity that will pay off handsomely for our country,” the minister said.