The Department of Home Affairs has moved to stop what it calls the exploitation and profiteering of South Africa’s identity verification system, accusing some private entities of overwhelming the National Population Register (NPR) for profit while paying rock-bottom fees that left the state unable to maintain the system.
For more than ten years, registered users, including major banks and private companies, have paid as little as 15 cents per identity check, a price the department now says enabled abuse, degraded public services, and posed a serious risk to national security.
“The artificially-low pricing structure has led to such severe under-investment in the NPR that it now poses a direct threat to financial inclusion, to the ability of the government to combat identity and financial crime, and to national security,” the department said.
Minister of Home Affairs Dr Leon Schreiber announced that a new pricing model will take effect from July 1, raising the cost of real-time identity verifications to R10 per check. To ease the transition and avoid overloading the system, a low-cost R1 batch verification option will also be introduced for off-peak use.
The move follows years of complaints about Home Affairs’ “system offline” issues, which the department now links directly to unchecked demand from underpaying institutions. Some users reportedly made massive profits by building private services on top of the state’s database, while the system itself crumbled under pressure.
“Some users then went on to exploit the unreliability of the system created by their excessive use, to create third-party verification services that charge prices vastly in excess of those paid to Home Affairs,” the department said.
The failure rate of the current system had skyrocketed to over 50%, defeating the purpose of real-time identity checks and crippling services at frontline offices. But a modernised verification platform, now rolling out nationwide, brings that failure rate down to under 1%, the department said.
Minister Schreiber was blunt in his assessment.
“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.”
He said the reform would also support South Africa’s financial system by addressing weaknesses flagged by the Financial Action Task Force (FATF), which placed the country on its grey list due to inadequate safeguards against financial crime.
Calling on all users of the verification system to act in the national interest, Schreiber added; “I thank the many stakeholders who expressed support for this vital reform… and call upon all users of the OVS to rise above narrow profiteering to support the safeguarding of national security.”
The overhaul is also a critical step toward the government’s goal of establishing a Digital ID system, with the upgraded NPR expected to serve as the foundation.
“A healthy NPR is also a prerequisite for a functional Digital ID, this investment in the NPR is an investment in national security, in financial inclusion, and in the value of our cherished South African identity,” Schreiber said.
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