Home Affairs dragged to court as R10 ID check fee sparks industry backlash

A small fee with big consequences

What started as a seemingly technical adjustment inside Home Affairs has now landed squarely in the courts and at the centre of a growing debate about who ultimately pays for South Africa’s digital infrastructure.

The Association of Communications and Technology (ACT), which represents the country’s major mobile network operators, has launched a High Court review challenging new Home Affairs regulations that sharply increase the cost of verifying identities against the National Population Register (NPR).

At issue is a dramatic jump in fees: from 15 cents per identity check to R10, an increase that has rattled the telecommunications, banking and financial services sectors, all of which rely heavily on real-time ID verification to comply with the law.

Why telecoms and banks are pushing back

ACT argues that the increase, which came into effect after regulations were published in June 2025, is excessive, poorly consulted on, and likely to ripple down to consumers already under financial pressure.

According to the lobby group, its members play a central role in enforcing RICA compliance, which legally requires identity verification for SIM cards, bank accounts and other essential services.

ACT CEO Nomvuyiso Batyi says the group repeatedly asked for meaningful engagement before the new fees were introduced, but those requests went unanswered.

She describes the move as a sharp break from constitutional principles of cooperative governance and accountability, especially given the scale of the increase, which ACT pegs at over 6,500%.

At the heart of ACT’s legal challenge are four key concerns:

• The decision was taken without proper consultation with affected industries

• The fee hike is disproportionate and lacks a rational basis

• It harms sectors that depend on identity verification

• The absence of a transition period has caused immediate and ongoing damage

For companies that process millions of ID checks a month, ACT warns the costs add up fast and those costs rarely stay at corporate level for long.

Fears of higher prices for ordinary South Africans

The concern isn’t just about corporate margins. ACT argues that higher verification costs will inevitably be passed on to consumers, pushing up the price of essential services such as mobile connectivity, banking, and digital onboarding.

This fear has struck a nerve in a country where affordability already shapes access to technology and finance.

On social media and in industry forums, critics of the increase have framed it as another example of a necessary public service being priced beyond the reach of the poor, particularly first-time bank users, informal workers and grant recipients.

Not the first warning shot

ACT isn’t alone in its opposition.

Digital banking group Tyme previously wrote directly to President Cyril Ramaphosa, urging him, along with Finance Minister Enoch Godongwana and Reserve Bank Governor Lesetja Kganyago, to intervene.

Tyme Group CEO Coenraad Jonker warned that the new pricing structure could make it commercially unviable to serve low-income South Africans.

In strong language, Jonker described the fee increase as a regressive move that risks shutting vulnerable communities out of the digital economy altogether.

“This is not just a policy shift, it’s a regressive tax on the most vulnerable South Africans,” he said.

Home Affairs Minister Leon Schreiber, however, dismissed the criticism, accusing Jonker of prioritising profits over the public interest.

Home Affairs hits back

Home Affairs has responded forcefully to the criticism, insisting that the increase was not only lawful, but long overdue.

Through spokesperson Carli van Wyk, the department argues that taxpayers had effectively been subsidising private companies’ access to sensitive population data for more than a decade.

The 15-cent fee, unchanged since the Online Verification Service (OVS) was introduced in 2013, is described as “unsustainable”, especially as usage surged and maintenance costs climbed.

By 2024, Home Affairs says more than half of all verification attempts were failing, creating serious risks including failures linked to RICA compliance.

The department also alleges that some corporate users abused the system so heavily that Home Affairs’ own offices struggled to access the population register, contributing to the familiar “system offline” frustrations experienced by the public.

A system under strain and a reset

Home Affairs claims the underpricing led to the near-collapse of the OVS, leaving it unable to fund upgrades or improvements.

The department says the new pricing model, approved with the concurrence of the Minister of Finance has already allowed for major system upgrades, resulting in faster, more reliable verifications.

It also introduced a lower-cost off-peak option at R1 per transaction, which it says helps balance affordability with sustainability.

Crucially, Home Affairs links the upgraded system to broader reforms, including expanded access to Smart ID and passport services through bank branches and digital banking apps a cornerstone of its modernisation drive.

What happens next

With the matter now before the High Court, the clash sets up a broader test of how South Africa balances digital transformation, public funding, private sector reliance and consumer protection.

ACT says the sudden fee hike threatens affordability and access. Home Affairs insists it is correcting a decade of underfunding and abuse.

The court will ultimately decide whether the price correction was a necessary fix or an unfair burden passed down the line.

Either way, the outcome could shape how South Africans access essential services in an increasingly digital state.

{Source: BusinessTech}

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