There are alternatives to government’s biometric checks.
Sectors that depend on biometric identity verification – including financial services, mobile network operators and credit providers – are under pressure after the Department of Home Affairs (DHA) implemented a steep fee increase for access to its database.
Identity verification company Ideco says these industries are well-positioned to circumvent the department entirely by using alternative digital solutions that do not rely on home affairs’ systems.
Marius Coetzee, Ideco MD, tells ITWeb that industry players are exploring other ways to meet identity verification requirements. “What home affairs is currently doing is they’re just opening opportunities for industry to bypass them and find their own solution.”
This follows the department’s rollout of an upgraded National Population Register (NPR), which increased the cost of biometric verification checks from 15c to R10 – a jump of more than 6 500%.
TymeBank, among others, criticised the change, arguing that such a pricing model threatens financial inclusion, particularly for low-margin businesses that rely on affordable verification.
Cellular companies will also be affected as they need to comply with requirements to verify identities when consumers buy SIM cards under the Regulation of Interception of Communications and Provision of Communication-related Information Act (RICA).
Speaking on behalf of the mobile network operators, the Association of Comms and Technology says: “We are concerned that the increase will have an impact on the cost of RICA, especially for prepaid customers.”
MTN South Africa says it is “mindful of the potential cost implications this may have for both the business and our subscribers”.
The mobile network operator is engaging with industry stakeholders and regulators to assess the long-term impact and ensure implementation of pricing structures is effective and sustainable.
The DHA has defended the new pricing, stating the 15c previously paid by industry was not aligned with market-related rates for comparable services. It also claimed that some users abused the system, resulting in failure rates of more than 50%.
Coetzee explains that identities can be digitally verified using data from credit unions or other data service providers.
He adds that technologies also exist to scan smart ID documents and store them in secure databases, compliant with the Protection of Personal Information Act.
One such method includes capturing a real-time selfie and matching it to a scanned smart ID. “That happens with absolute accuracy,” he says. This process helps build a digital profile that can be used in subsequent transactions requiring identity verification.
“The market is going to make another plan. The market always makes a plan. That’s one thing about South Africans. They are very creative in how they approach these types of situations,” says Coetzee.
He adds that without digital options, the alternative would be to revert to manual methods, such as photocopying ID books, which exposes individuals to increased risks of identity theft. “You can buy ID books on the street corner. Digital verification is an absolute must, in my opinion.”
Digital verification also has a large role to play in helping South Africa to meet requirements set out by the Financial Action Task Force (FATF). It greylisted the country in February 2023 due to weaknesses in its anti-money-laundering and counter-terrorism financing controls. FATF is expected to visit the country in October to assess its progress toward remediation.
Entelect points to digital identity profiles − collections of personal identification data that can be stored securely on a mobile device − as a potential solution. These can be presented by users whenever identity needs to be verified.
However, credit bureau TransUnion cautions that these technologies are not a full replacement for DHA services.
“While alternative methods may supplement verification processes, they are not a full substitute for DHA services, particularly in scenarios where biometric validation or official registry data is mandated,” says Amritha Reddy, senior director of fraud solutions at TransUnion Africa.
Reddy says home affairs verification remains a critical component in regulated environments and for legal compliance. “Ultimately, while credit bureaus such as TransUnion play a crucial role in verifying identities, the future of identity verification lies in integration and interoperability, not in substitution.”
Coetzee, meanwhile, says industry players are already finding ways forward. “We can provide solutions to the industry that are digitally-based and totally sound. Even if you don’t use home affairs in that case, there are other ways to handle these types of transactions.”
