The move, which has already drawn fire from the telecommunications industry, has now been harshly criticised by Coen Jonker, co-founder of digital bank TymeBank , who has voiced his unhappiness in an open letter to the minister, Leon Schreiber. But Schreiber has hit back at Jonker, calling his letter faux outrage and accused TymeBank of profiteering over people.
Home affairs has said that from 1 July next week it would begin the roll-out of an upgraded National Population Register NPR verification service to all companies and government users to verify identities with "first-class speed and reliability".
"?For more than a decade, banks and financial service providers have only paid 15c for real-time verifications against the NPR. This is below market-related rates charged by the private sector for comparable services and far below the cost to the state of providing the online verification service, which deprived home affairs of the resources required to maintain the NPR," home affairs said.
"Extreme under-pricing has led to profiteering and abuses by some users that overwhelm the NPR and cause failure rates of more than 50, contributing to 'system offline' failures at home affairs offices and threatening national security."
"This is not just a policy shift - it's a regressive tax on the most vulnerable South Africans. It undermines the progress we've made towards digital inclusion, weakens the financial sector's ability to comply with anti-money laundering laws and risks reversing efforts to exit the Financial Action Task Force FATF grey list," he wrote to Schreiber.