On 1 July 2025, South Africa’s Department of Home Affairs (DHA) raised its digital identity verification fee from R0.15 to R10 per real‑time check—a staggering 6 500 % hike. As accountable institutions and industry leaders scramble to adapt, the founder of WhoYou labels it
“Deeply flawed.”
This article explores why the fee hike threatens digital identity verification, increases the likelihood of fraud in the private sector and risks undoing years of progress.
Background & Context
On the 19th March 2025, the Minister ofHome Affairs gazetted a Draft 14th Amendment to the Identification Act of 1997. This draft included the staggering 6 500% price hike to retrieve information from Home Affairs in real-time. This price increase would be implemented a mere six working days later.
Credit bureaus, system integrators and numerous accountable institutions clambered to de-risk their businesses by not querying DHA directly to avoid the price increase.
Numerous letters from various industry bodies were sent to the Minister of Home Affairs detailing the impact the hike would have on the Private Sector. The Draft Gazette was redacted for public comment on the very day the price hike was to go live.
According to Lynette de Beer, the Acting National Credit Regulator, the proposed pricing sits at the higher end of global benchmarks for ID verification services. For context, South Africa’s new rate of R10 per verification (~USD 0.53), is significantly higher than the global average (~USD 0.20) and regional average of (~USD 0.11).
Fast forward to the 23rd of June, after little to no feedback on all public comments made, lo and behold, the same price hike had been gazetted. Not as a merely Draft but rather a Regulation. It seems the public comments were noted but ultimately disregarded.
The DHA justified the fee increase by citing chronic underinvestment, system failures, and threats to national security. According to the department, outdated pricing models were unsustainable.
The Private Sector has lashed back at Home Affairs citing the same feedback to the price hike. Accountable institutions are required to adhere to regulatory requirements while the fee to do so is simply unsustainable.
Impact on South African citizens & Industries at large
The impact on compliance teams in banking, fintech, and KYC-driven services is immediate and severe. Tyme Bank estimates that onboarding one million Social Relief of Distress clients would now costR20 million in DHA verification fees alone—placing serious pressure on low-margin segments.
Moreover, numerous institutions—including Tyme Bank, Luno, Mesh Trade, and crypto exchange AfriDax—are loudly warning that the R10 fee threatens financial inclusion and affordability. As Mesh Trade CEO Connie Bloem warned, the fee hike directly harms South Africa’s goal of inclusive finance.
Threats to Digital Identity Authentication
Even though off‑peak batch verifications are cheaper, real‑time checks remain indispensable.
“In the digital world, everything is real time.”
Argued Christo de Wit of Luno. Slowing verification speeds—or routing users to paper-based alternatives—risks reintroducing fraud and inefficiencies. Despite the fee increase already being implemented, the Department of Home Affairs has yet to provide the necessary technical details for the private sector to integrate batch verification. An omission that undermines the very solution they are promoting as a cost-saving alternative.
Experts, including those featured in Intelligent CIO and ITEdge News,warn that firms might revert to photocopying ID books—exposing sensitive documents and reducing KYC effectiveness. Fraud syndicates exploit papervulnerabilities; duplicating old‑school processes undermines strides toward secure digital identity, jeopardizing consumer privacy.
Industry Perspective
At WhoYou, we see this fee hike as short‑sighted.Craig Hills, Managing Director, sums it up:
“While we support the need to modernize public infrastructure, this decision is deeply flawed. To improve government service delivery, the private sector is forced to stop utilising the real-time service and fail-over to antiquated solutions that are more affordable but less reliable. The R10 fee not only undermines the promise of digital identity verification in South Africa—it financially punishes solution providers and businesses striving to innovate. We risk a future where trust and speed are betrayed by cost.”
In discussions with clients across industries, it became evident that batching identity checks offers little value other than for compliance purposes. By the time a delayed Department of HomeAffairs (DHA) query is processed, the opportunity to prevent fraud has likely passed.
To prevent regression, we urge DHA to reconsider their pricing strategy. Options include:
- Implementing tiered pricing aligned with transaction volumes
- Expanding public–private cost‑sharing models
- Prioritizing transparent and ongoing industry dialogue
While we acknowledge the Department of HomeAffairs’ three-month cost optimization window for batch verification, the R10 real-time fee remains burdensome for low-margin services and high-volume use cases.
Public sector collaboration matters. As DHA’s strategic plan shows, the department aspires to become digital‑first by 2030—but success depends on pricing that supports, not stifles, innovation.
Conclusion
While the private sector waits to see whether DHA’s updated OVS delivers improved reliability, the R10 per real‑time verification fee poses a serious threat to digital identity verification. Accountable Institutions across sectors face higher costs, slower onboarding, and ethical dilemmas about cost absorption or passing fees to end users.
Now is the time for collective action. Industry must collaborate with DHA and policymakers to establish a fee structure that secures national identity infrastructure while protecting financial inclusion and digital transformation.
By working together, we can ensure secure, accessible, and sustainable digital identity verification—safeguarding progress without strangling innovation.
