Latest news with #Capitec
Daily Maverick
2 days ago
- Business
- Daily Maverick
Home Affairs' Leon Schreiber stands by identity verification price hike
Digital access or regressive tax? TymeBank, Capitec and Minister Leon Schreiber weigh in as Department of Home Affairs identity verification fee hike becomes law. A 6,500% spike in the cost of identity verification is now official, and, as you probably have read from your service providers, South Africa's banks, fintechs and digital economy enablers are scrambling to respond. From 1 July 2025, the Department of Home Affairs (DHA) will charge R10 per real-time identity verification, up from a nominal 15 cents. The change, gazetted without industry consultation, has sparked confusion and a rare flash of alignment between tech-driven financial inclusion advocates and the banking establishment. TymeBank was out the gate early, calling for an immediate halt to the increase, describing it as a 'crippling blow to financial inclusion'. Capitec, on the other hand, is quietly absorbing the cost, for now. Minister of Home Affairs Leon Schreiber insists that if South Africa wants a digital economy, this is the cost of doing business. Killing progress in the name of? TymeBank's CEO, Coenraad Jonker, appeared prepared for this. 'This threatens financial inclusion, digital transformation and national compliance efforts,' he warned in a public letter to the President and several Cabinet members. The bank serves millions of grant recipients and informal workers – clients whose digital access depends on low-cost onboarding and verification. 'This is a regressive tax on the most vulnerable South Africans,' said Jonker, accusing the department of undermining the idea of a digitally inclusive economy. The new cost, he argues, makes it 'commercially unviable to serve low-income South Africans'. The increase, Jonker contends, also risks derailing efforts to get South Africa off the Financial Action Task Force's greylist. 'You can't comply with AML [anti-money laundering] laws if you can't afford to verify identities,' he said. The bank is calling for the increase to be paused and replaced with a performance-linked, inflation-indexed pricing model developed through structured industry consultation. Necessary pain In contrast, Capitec supports the mission to upgrade the National Population Register and improve the reliability of its online systems. 'These crucial upgrades require a fee increase,' the bank said, noting that identity verification was a 'critical building block to prevent fraud, which ultimately comes at a significantly higher cost to all South Africans'. To protect its clients, Capitec is absorbing the increased costs for the 2025 financial year and promises no fee hikes to customers as a result. Daily Maverick asked Schreiber for comment and guidance, but the minister forwarded links to existing stories on the matter – and then it clicked. Echoes from Estonia 'People underestimate just how central Home Affairs is to our lives,' he said during the interview at the e-Governance Conference in Estonia. 'Home Affairs is also the foundation of the financial system.' Schreiber was telegraphing the move, framing it as a comment on the importance of digital verification in banking: 'When you open a bank account and you put your fingerprint there, it's Home Affairs that ultimately provides that data to verify who you are.' And if that data isn't credible? 'Your financial system is not credible. Your tax system is under threat,' he warned. The minister has made digital transformation the 'apex priority' of his department. He says phasing out the green ID book, developing a digital ID and ensuring interoperability of state databases are all key to building a more resilient and secure South Africa. The bigger picture 'It's all counter-fraud,' he explained. 'It strengthens Sars and revenue enforcement. And it's doable – Estonia has done it.' At the heart of this fee fight lies a critical question: can South Africa afford to modernise its public systems without deepening digital exclusion?
Zawya
3 days ago
- Business
- Zawya
South Africa's banks post growth as economic climate improves
South African banks have posted strong revenue growth in 2024, as an improving macroeco- nomic climate and a stabilising political environment bolster the outlook for the country's banking giants. In the first half of the year Standard Bank reported headline earnings of 22bn rand ($1.2bn) – a 4% rise compared to the same period the year before – and a return on equity of 18.5%. In the same period, Old Mutual's pre-tax profit rose by over 10% to 9.22bn rand ($504m), while Capitec saw headline earnings growth of 36% to 6.4bn rand ($350m). FirstRand, Absa and Nedbank also saw similarly strong revenue growth. Com- bined, South Africa's major banks saw a total headline earnings growth of 2.5% in the first half of 2024 compared to 2023 – despite South Africa's macroeconomic picture being complicated in the period owing to a fraught election campaign and considerable levels of political volatility. What explains this strong performance across the board? Higher interest rates in South Africa and globally are part of the picture. With interest rates starting 2024 at 8.25% and still standing at 7.75% – com- pared to pandemic levels of around 3.5% – this has boosted the net interest income banks South African receive on their issues of loans. South African firms expand across continent Part of the growth is also coming from the fact that many major South African finan- cial institutions are increasingly investing abroad in other African markets. Furthermore, international banks with their headquarters in the UK or Europe, such as HSBC, Standard Chartered and BNP Paribas, are increasingly divesting from Africa in order to focus on their core operations and markets. This is opening the door for Africa's most prominent financial institutions – many of which are South Af- rican – to fill the gap that has been left by their departure. Of course, pan-African expansion is not without its risks. While many African markets are seeing high levels of revenue growth in local currency terms, the ongoing strength of the US dollar and massive de- preciation of African currencies has posed difficulties for international banks operating on the continent. However, the upside is also consider- able. For Standard Bank, 41% of the group's headline earnings now come from their franchises in its 'Africa regions', with par- ticularly strong growth from countries such as Angola, Ghana, Kenya, Mozambique, and Nigeria. Partly because of their pan-African expansion, Standard Bank's active client base grew by 5% in the first half of the year. Other South African banks are now simi- larly seeking to enhance their presence across Africa. Nedbank is aiming to reduce its dependence on South Africa by expand- ing into new African markets. The bank recently set the target of increasing the profit share from other African countries from the current level of 9.2% to almost 40% within the next decade. Making strides in fintech Another reason for their strong perfor- mance is that South African banks have also been quick to embrace the potential offered by digitalisation. A recent report from PwC noted that 'the migration of customers to digital banking platforms and channels... has moved from theme to certainty.' 'South Africa's major banks have con- sistently grown their number of digitally active clients every reporting period since the second half of 2019 to approximately 20m,' the report said. The move to digital has allowed South African banks not only to expand their client bases, but also to enhance and personalise the customer experience while making cost-cutting sav- ings, boosting profitability. These digitalisation trends have also contributed to the growth of South Africa's fintech industry, which has become an- other important player in the country's finance scene. In 2023, the country was home to 140 fintech start-ups – around 20% of the African total. South Africa's traditional financial institutions have often moved to support the growth of the country's new fintechs, recognising the growth potential of the fintech industry. For example in March 2024 Standard Bank announced that it would be provid- ing a 200m rand ($11m) 'growth facility' to the Johannesburg-based fintech Float, which offers 'buy now pay later' services – allowing consumers to make purchases on credit cards and split their payments over 24 interest-free and fee-free monthly payments. The facility will allow Float to facilitate the mass rollout of its platform and accelerate its growth plans over the next four years. Announcing the move, Standard Bank said, 'Float aligns with Standard Bank's strategy of driving sustainable growth and supporting fintech businesses which promote financial inclusion and digital transformation across Africa... assisting innovative, high-growth businesses is a key component in achieving sustainable growth across the African technology, me- dia, and telecom landscape.' The potential of South Africa's fintechs is perhaps best evidenced by some ma- jor investments that have taken place. In December the South African digital bank Tyme Group became Africa's latest uni- corn, securing a $250m investment from Brazilian firm Nubank in a Series D round valuing the company at $1.5bn. TymeBank already has 10m users in South Africa and specialises in providing financial services to lower-income and financially excluded individuals. This approach has seen the digital bank secure strong growth even prior to the Nubank cash injection: its net operating income tripled year-on-year in 2024, despite its operational costs going up by 10%. More growth is likely to be in store for TymeBank and other South African fintechs: consultancy Birguid has predicted that the number of South Africans using neobanks will total 19.5m by 2027, driven by continued and rising demand for mobile banking, and a focus on reaching underserved com- munities through digital solutions. Coalition government stability a boon The outlook appears to be positive for South Africa and its banking sector. The establishment of a stable coalition govern- ment after a historic election in May has re- assured investors and business, particularly given the government has embarked on an ambitious programme of structural reform in key areas such as energy and logistics. Lingering challenges in, for example, the country's ports and railway network have hindered growth; but the new coalition government has made resolving these challenges a defining priority. South Af- rica's government of national unity (GNU) has also committed to boosting job crea- tion, slashing public debt, and investing in infrastructure. The Bureau for Economic Research at Stellenbosch University has predicted that these reforms will see South Africa achieve a stronger growth rate of 2.2% in 2025. With inflation on the way down, the South African rand stabilising and strength- ening against the US dollar, and interest rates predicted to come down further, South Africa's growth prospects are looking bright. Similar trends are expected across the region in the key markets in which South African banks operate. The global credit ratings agency S&P recently lifted the outlook for South Afri- can debt from 'stable' to 'positive', saying that the upgrade 'reflects our view that increased political stability following the May general elections and impetus for reform could boost private investment and GDP growth'. While South Africa's rating remains at BB-, below investment grade, a possible credit ratings upgrade would make it cheaper for the government to borrow from capital markets to fund its infrastructure plans. South Africa's banks have proved their resilience in challenging macroeconomic circumstances, with ambitious expansion and digitalisation plans driving up their revenues and profitability. As economic pressures ease and, it is hoped, higher levels of growth return, South African banks are well poised to continue on this promis- ing trajectory. © Copyright IC Publications 2022 Provided by SyndiGate Media Inc. (
The Citizen
3 days ago
- Business
- The Citizen
Take-home pay slides for third month with grim job opportunities and earnings
Are you earning the average take-home pay of R17 296 and is it enough to cover all your expenses or are you affected when it decreases? The average take-home pay slowed for the third consecutive month in May, reflecting the impact of a subdued economic environment with stalled growth in the first quarter and a weakening global outlook, currently fuelled by the heightened volatility in the Middle East. According to the latest BankservAfrica Take-home Pay Index (BTPI), which tracks approximately 3.8 million salary earners in South Africa, the nominal average take-home pay decreased to R17 296 in May, 1.3% lower than the R17 532 registered in April, Shergeran Naidoo, BankservAfrica's head of stakeholder engagements, says. However, this figure remained significantly higher than the R15 903 recorded in May 2024. 'The upward trend in take-home pay from mid-2024 to early 2025 has been a positive development. However, recent months reflect a U-turn, with 2025 proving to be a volatile year so far, marked by multiple global shocks accompanied by a good dose of local challenges,' Elize Kruger, an independent economist, says. 'Downward revisions to global as well as local economic growth prospects have lowered confidence levels and put a pause on investment decisions, as investors and households hold back on their spending decisions. Together, these could hurt employment and earnings prospects of salary earners in the coming months.' ALSO READ: Capitec CEO tops banking pay charts — but how do staff salaries compare? A look at how SA's top five banks pay Quarterly Employment Statistics show average take-home pay of R28 289 According to the Quarterly Employment Statistics for the first quarter of 2025, the average monthly earnings paid to employees decreased by 0.1% from R28 316 in November 2024 to R28 289 in February 2025. According to the BTPI, take-home pay, adjusted for inflation, increased by 1.1% in May to R14 832 compared to R15 003 in April, but remained 5.8% higher than year-ago levels. 'The significant moderation in consumer inflation continues to have a positive impact on salary earners and their purchasing power, with the latest headline inflation figure for May 2025 at only 2.8%. 'However, the recent spike in international oil prices, due to the escalating conflict in the Middle East, could result in higher-than-expected headline inflation in the coming months and into 2026, Kruger says. She points out that the international Brent Crude Oil price increased to around $78/barrel after the US's attack on Iran's nuclear facilities, but talks about a ceasefire quickly triggering a reversal with oil prices dipping below $70/barrel again. 'Against expectations and despite the global volatility, the rand exchange rate remained notably resilient, providing a marginal offset of the higher oil prices on fuel price expectations. With the daily under-recovery at pumps running between R1.50/l for petrol grades and R2.70/l for diesel in recent days, it is clear that economic pain is on the radar for salary earners and the economy at large.' ALSO READ: Take-home pay increases significantly in 2024 Petrol increases coming that will affect take-home pay Kruger points out that petrol prices are forecast to increase by about R1/l and the prices for diesel by R1.30/l on 2 July, and further increases could be expected in August. 'These will push headline inflation upwards towards 5% by year-end, ahead of the 3.6% forecast for 2025. 'Concerningly, with the higher base calculation of 2025, the forecast average headline inflation for 2026 could be well above 4.5%, eroding the positive effects of lower inflation and likely triggering more conservatism from the South African Reserve Bank (Sarb). 'Any further monetary loosening looks unlikely at this stage, considering that the Middle East conflict is intensifying and the resultant negative impact on local fuel prices. Still, despite the negative developments outlined, 2025 is expected to be the second consecutive year of positive real take-home pay growth, supporting demand in the economy.' ALSO READ: Salary survey shows gap between increases and inflation narrowing Remchannel survey shows average salary increased by 5.82% in 2025 Meanwhile, the Remchannel Salary and Wage Movement Survey, a biannual report by Old Mutual published in April 2025, indicated that the average salary increased by 5.82% in 2025, compared to 6.09% in the previous year. Kruger says this trend suggests a more cautious approach by employers, who must also prioritise cost control amid a constrained economic environment. Interestingly, she says, the report revealed a reduced overall staff turnover rate of 13.5%, reflecting a market with fewer new job opportunities due to widespread downsizing by companies. She emphasises that this data confirms the financial pressures employees live with, as 39% of those who resigned were seeking better pay and career growth, while 31% left due to dissatisfaction with their current roles. 'With the local economy stalling in the first quarter and the weakening global backdrop adding to the downside scenario, the prospects of favourable earnings and employment opportunities have dimmed. ALSO READ: Salaries decreased by 2% in April, but higher than a year ago Policies must foster rather than deter employment in SA 'The latest Quarterly Employment Statistics survey released by Statistics SA indicated that total employment in the formal non-agricultural sector decreased by 74 000 in the first quarter of 2025, with employment falling from 10.65 million people in December 2024 to 10.58 million people by March 2025. 'According to the survey, 95 000 jobs were lost between March 2024 and March 2025. The Labour Force Survey, which also included the informal sector, agricultural sector and employment in households, echoed the pressure, showing that the unemployment rate ticked higher to 32.9% in the first quarter, with 291 000 job opportunities lost. 'The unemployment situation in South Africa remains a crisis and deserves to be one of the top priorities of government. It is imperative that government pushes forward on structural reforms across sectors such as energy and logistics. 'This could contribute towards solving our local predicaments, lifting the local economy's medium-term growth potential, but government must also ensure that policies and laws will foster rather than deter employment in South Africa.'
IOL News
3 days ago
- Business
- IOL News
Capitec supports identity verification fee increase amid TymeBank criticism
Home Affairs Minister Leon Schreiber described the changes as a 'matter of national security, plain and simple.' Image: Ntswe Mokoena/GCIS Capitec has come out in support of the Department of Home Affairs' plan to raise fees for identity verification, stating that the upgrades are necessary to improve security and fight fraud. This comes after criticism from TymeBank CEO and Co-founder Coenraad Jonker, who described the fee increase as a 'catastrophic 6,500% increase in indemnity verification fees.' 'We are calling for a phased, performance-linked model that enables planning and protects financial access for underserved communities. This decision puts the Department on the wrong side of history. Digital transformation should open doors, not close them,' Jonker said. In a statement to IOL, Capitec said it 'supports the Department of Home Affairs' initiative to upgrade the National Population Register and enhance the stability and reliability of its Online Verification System.' The bank emphasised that the changes were crucial for developing a secure digital economy and tackling identity fraud. They also said that they would cover the extra costs internally, so customers would not see an increase in banking fees. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ "While we understand these crucial upgrades require a fee increase from the Department, we have decided to absorb the additional costs. This means our clients will see no change to their banking fees as a result of this initiative for the current financial year," the bank said. "The digital identity verification service is a critical building block to prevent fraud, which ultimately comes at a significantly higher cost to all South Africans. By ensuring this system remains robust, we are helping to build a safer and more accessible financial future for everyone. "Capitec remains committed to working with the government to advance secure digital banking and protect our clients from evolving threats". IOL previously reported that the Department of Home Affairs said it was acting to stop the abuse of the identity verification system, accusing some private companies of overusing the National Population Register for profit while paying fees too low to sustain the service. IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel
News24
4 days ago
- Business
- News24
Capitec backs Schreiber's 6 500% fee hike for home affairs database checks
Capitec's headquarters in Stellenbosch. Supplied/Capitec Be among those who shape the future with knowledge. Uncover exclusive stories that captivate your mind and heart with our FREE 14-day subscription trial. Dive into a world of inspiration, learning, and empowerment. You can only trial once. Start your FREE trial now Show Comments ()
