South Africa justifies new IDV pricing structure

South Africa’s Ministry of Home Affairs says a new tariff scheme for its national Online Verification Service (OVS) will go into effect on Tuesday next week (July 1).

In a statement, the ministry said the move became inevitable for several reasons, including its inability to effectively manage the NPR partly due to the meagre fees collected for IDV.

From July 1 therefore, it says that the 0.15 South African Rand (US$0.008) fee collected per real-time identity verification for the past decade will change to R10 ($0.55) per real-time verification during peak hours, and R1 ($0.055) per batch verification during off-peak hours.

These charges are only for private sector users as all government entities will continue to use the service gratis, according to the statement.

The new system, whose upgrade completion was announced in March, follows a pilot process which Home Affairs Minister Leon Schreiber described as having yielded promising results.

In the past couple of years, the OVS system, which is linked to the NPR, had become overburdened and unreliable with failure rates of up to 50 percent. The government said the poor state of the NPR did not only lead to frequent error messages, but posed a threat to national security and hindered efforts to effectively fight identity fraud and financial crime. Also, some service seekers took advantage of the cheap access to make profits, including by creating expensive third-party verification services.

These challenges and more triggered the need to introduce a new pricing model that would, among other things, improve service delivery, promote financial inclusion, support the country get delisted from the FATF grey list, strengthen national security as well as future-proof other digital initiatives.

The government says the new system “functions as a sleek, modern system that delivers what it was designed to do” and now “performs in real-time and the failure rate has been reduced to below 1 percent.”

Commenting on the change, Schreiber said: “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. This upgrade also advances financial inclusion and makes a significant contribution to South Africa’s attempts to get off the Financial Action Task Force’s grey list.”

“I thank the many stakeholders who expressed support for this vital reform in the interest both of national security and of South Africa during our public consultations, and call upon all users of the OVS to rise above narrow profiteering to support the safeguarding of national security.”

He adds: “A healthy NPR is also a prerequisite for a functional digital ID, as the NPR must become the central database against which identities are verified as Home Affairs becomes a digital-first department. This investment in the NPR is an investment in national security, in financial inclusion, and in the value of our cherished South African identity that will pay off handsomely for our country.”

The government describes the price adjustment as a strategic shift that aims to support South Africa’s long-term digital transformation through a reliable and modernized NPR.

Article Topics

digital identity  |  fraud prevention  |  identity verification  |  South Africa