The Department of Home Affairs is being sued over increased ID verification costs.
The Department of Home Affairs (DHA) says it welcomes a legal challenge to its decision to hike identity verification fees by 6 500%, arguing the court case will “expose” how private companies profiteered under the previous fee structure at taxpayers’ expense.
This is in response to the Association of Communications and Technology (ACT) – representing Vodacom, Cell C, MTN and Telkom – going to the High Court to challenge home affairs minister Dr Leon Schreiber’s 2025 decision to increase the cost of a biometric check against the National Population Register from 15c to R10.
The fee applies to companies verifying customer identities using government’s Online Verification System (OVS), a process required under RICA regulations that affects millions of transactions monthly across telecommunications, banking and other sectors.
The DHA has accused corporate users of abusing an “unsustainably underpriced” system to “extract enormous profits” while the state-run verification system was starved of resources needed for maintenance and upgrades.
The department says for more than a decade, taxpayers unwittingly subsidised corporate users of the OVS at just 15c per real-time identity verification – pricing that had not been adjusted since the service was introduced in 2013.
See also
“It is this profiteering at the expense of taxpayers and ordinary South Africans, who have to endure long queues and ‘system offline’ challenges as a result of the abuse of the OVS, that ACT’s court case seeks to reinstate,” says Carli van Wyk, Schreiber’s spokesperson.
Van Wyk adds the department “welcomes the opportunity to now expose before the courts, in granular detail, how some users came to rely on unsustainably underpriced access to the personal information of South Africans to drive profits under the previous fee structure at public expense”.
Nomvuyiso Batyi, CEO of the Association of Communications and Technology. (Photograph: Supplied)
The department has levelled serious allegations about corporate behaviour under the old pricing regime. It claims some corporate users abused the underpriced service so extensively that the DHA’s own offices lost access to the population register.
The department has also accused the private sector of “apparently creating intermediaries to on-sell data at a premium, on the basis that the OVS that they had themselves driven to near-collapse through underfunding and abuse, was unreliable”.
ACT argues the fee hike is “unjustified”, “disproportionate” and “not rationally connected to the stated objectives”. Its court papers contend the regulations will have a detrimental effect on telecommunications, financial services and other industries relying on consumer identity verification.
The telecommunications body warns the increase will have severe cost implications.
ACT previously told ITWeb that roughly 80% of South Africa’s mobile subscribers need to go through SIM card registration regularly because people frequently change SIM cards for competitive promotions, special offers, or due to loss or theft.
“This level of churn drives millions of RICA registrations monthly, meaning that even a R10 fee per transaction could cost the sector tens of millions of rands each month,” ACT says.
The association argues this “will make it far more expensive for network operators, banks and other companies to verify their customers’ identities. Ultimately, this would likely push up the cost of essential services for millions of South Africans who are already under financial pressure.”
ACT CEO Nomvuyiso Batyi says the association made “repeated requests for meaningful engagement and consultation”. However, “ACT and its members were not afforded a fair opportunity to make representations to the Department of Home Affairs prior to the implementation of the new fee structure”.
Batyi argues “the absence of meaningful, transparent and inclusive public consultation constitutes a significant departure from the principles of cooperative governance and accountability enshrined in the Constitution and the Promotion of Administrative Justice Act”.
Van Wyk denies this, saying the price correction was “done in full compliance with applicable legislation, following a period of public consultation in which members of ACT participated”.
The department says it obtained concurrence from the minister of finance, in compliance with the Identification Act of 1997, and corrected the fee per real-time verification from 15 cents to R10, while also introducing a low-cost off-peak verification option costing just R1 per transaction.
National security vs corporate interests
The DHA hiked the OVS cost in the middle of last year to coincide with the rollout of the revamped National Population Register.
The department says the previous pricing, which had not been adjusted since the service was introduced in 2013, led to the gradual decline and eventual near-collapse of the OVS.
By 2024, over 50% of verification attempts failed, including RICA verifications, which Home Affairs says exposed the country to “an unacceptable level of risk”.
Home Affairs minister Dr Leon Schreiber. (Photograph: Supplied)
“As a direct result of this long-overdue price correction, Home Affairs has since made substantial upgrades to the service that now consistently delivers world-class results within seconds,” the department says in a statement.
The integration between Home Affairs and the banking sector through the OVS also forms part of reforms that will enable South Africans to obtain smart IDs and passports at hundreds of bank branches around the country, and through digital banking apps, the department says. It adds that most users of the upgraded OVS have welcomed the reforms and the improved performance.
At the time of the fee hike, Schreiber framed the move in security terms: “This is a matter of national security, plain and simple. Every responsible state on earth must take the necessary steps to ensure a functional population register.”
Juniper Research data indicates that the cost of biometric verification will drop from $0.25 (about R4 at this morning’s exchange rate of R15.88) in 2025, to $0.17 (R2.70) by 2029. However, verification company Figs Flow pegs basic electronic verification checks at £2 (R43.65 at the morning’s exchange rate of R21.82) to £5 per check (R109) when purchased through subscription models with monthly minimums.
This isn’t the first time Schreiber has clashed publicly with the private sector over the fees. TymeBank co-founder Coenraad Jonker became involved in a public spat with the minister in mid-2025, accusing the department of forcing South Africa’s poor to pay to sustain the register by hiking costs.
Schreiber hit back on X, alleging the bank was profiting at the state’s expense and undermining national security.
