Speaking to TechCentral on Thursday, TymeBank co-founder Coen Jonker - who now serves as CEO of the bank's parent company, Tyme Group - said the move, by home affairs minister Leon Schreiber, to jack up the fees will harm financial inclusion in South Africa by making it more difficult to serve low-income customers.
Schreiber and his department have drawn fire from TymeBank, telecommunications operators and other industry players, who have warned that the price hikes - which will take effect on 1 July - are not only gratuitous but will have unintended consequences in the fight against crime and in serving the poorest South Africans with financial, telecoms and other services.
Legislation such as Fica the Financial Intelligence Centre Act and Rica the Regulation of Interception of Communications and Provision of Communication-related Information Act requires banks, telecoms providers and other consumer-facing entities to verify their clients' IDs against the home affairs database in an effort to fight money laundering and other white-collar crime.
Under Schreiber's plan, it will cost R10 per query for real-time ID verifications of the National Population Register, which Jonker told TechCentral on Thursday will take South Africa from among the most affordable markets in the world for this type of service to one of the most expensive. Until now, companies have paid as little as 15c per query.
Jonker earlier this week published an open letter to Schreiber in which he described the price hikes as "a crippling blow to financial inclusion and digital progress in South Africa".