According to DIDx founder Lohan Spice, the digital ID being developed by the Ministry of Home Affairs will allow South African citizens in the future to use it to 'seed' payment credentials within the Reserve Bank's PEMKey program, eliminating the need for a separate registration procedure.
PEMKey, which is part of the Reserve Bank's Payment Ecosystem Modernization (PEM) program, creates what the central bank calls a payment credential ecosystem that 'will provide secure, reusable, and reliable digital credentials for use across the entire payment ecosystem.'
Home Affairs Minister Leon Schreiber demonstrated the department's digital ID on his phone in the MyMzansi app on October 1st. The Ministry of Finance allocated 150 million rand to this application, and the South African Revenue Service (SARS) plans to provide digital identification to every taxpayer.
TechCentral approached DIDx, a South African digital identity company, regarding how these elements would be integrated. Spice and COO Gideon Lombard acted as digital identity specialists, emphasizing that they cannot speak on behalf of the Reserve Bank. Lombard stated that DIDx participates in various government-led digital identity initiatives and works with Interfront, a wholly-owned IT subsidiary of SARS, under a publicly tendered contract.
Since DIDx creates the digital identity and credential technology upon which PEMKey will rely, the company has a commercial interest in how the program is designed. The Reserve Bank has not yet published a list of PEMKey sandbox participants.
'The Golden Source of Truth'
Spice noted that the Ministry of Home Affairs is the 'fundamental golden source of truth' because it maintains civil registries containing records of citizen identification and fingerprints. The initial goal of MyMzansi is to provide 'person-to-government and government-to-person' services.
He believes that MyMzansi credentials can then be presented in PEMKey. 'Essentially, you seed your PEMKey,' he said. After verification, the user can 'skip all this registration process because the Ministry of Home Affairs has already done the hard work to prove that it is really me.'
The Reserve Bank has not specified whether MyMzansi credentials will be accepted. The PEMKey FAQ states that the ecosystem 'is based on trust established by baseline credentials and trusted authorities.' A presentation for industry dialogue in September describes an accredited issuer of 'personal payment credentials' that verifies identity 'through an approved check, such as data from the Ministry of Home Affairs.' However, the presentation does not mention MyMzansi.
Over time, Spice expects PEMKey to become a 'foundational element at the base level for public payments,' regardless of whether citizens pay the government or receive payments from it.
The Ministry of Home Affairs and SARS signed a digital pact in April 2025, and the core infrastructure of the digital ID will be built on the SARS hosting environment, with a working digital ID expected to launch in 2027/2028. The Ministry of Home Affairs plan involves collaboration between the Reserve Bank, banks, and telecommunications operators in integration.
Eighteen months ago, Lombard spoke of a 'small question' regarding 'who will win this identification race among all these departments.' Now, the Ministry of Home Affairs, SARS, and others are 'starting to use each other,' according to him.
He added: 'I need an identification account to do something with my tax affairs. This could include credentials from the Ministry of Home Affairs and credentials from SARS. There is no longer a zero-sum game between them.'
Many Providers
When asked if PEMKey would have one or multiple providers, Spice replied: 'My view is that the PEMKey program in the long term is not intended or designed to be controlled by any single organization.' He noted that 'the technology can come from anywhere, provided it meets PEMKey standards.'
The Reserve Bank presentation states that the PEMKey sandbox 'is open to all potential participants,' but participation 'is subject to approval and ongoing oversight by the Reserve Bank' and 'does not imply approval of production, accreditation, or future rights to participate.'
Spice emphasized that PEMKey 'is not intended for 'big brother' surveillance capabilities.' Its goal is to prove that the payer and payee have passed Know Your Customer checks without revealing who paid whom, although banks can still identify their customers if problems arise.
The Reserve Bank FAQ states that credentials 'are not stored in a centralized repository,' and that the ecosystem 'is not designed to track purchasing behavior, monitor how people spend their money, or build behavioral profiles.'
Spice considers the timelines set by the Ministry of Home Affairs technically realistic. 'It will exist. It will be functional,' he stated. However, he questioned the system's readiness for full-scale national rollout, suggesting it might first be available to a limited group of users, and Lombard anticipates a phased deployment. Spice concluded: 'The tricky thing here is governance and trust. What happens if something goes wrong? How do you revoke credentials?'
Adoption of the system will depend on what users can do with it, such as receiving a Sassa grant or 'paying taxes very efficiently without getting out of bed.' He added: 'To stimulate scale and adoption, e-services are needed.'