Financial crime and digital fraud are on the rise in South Africa. Interpol lists financial crime as one of the country’s top criminal threats. For fintech founders, product leads, and compliance teams looking to grow or enter the South African market, understanding how to implement KYC in South Africa effectively is non-negotiable.

KYC, or Know Your Customer, is the process of verifying a customer’s identity to protect your business from fraud, build user trust, and stay compliant with regulations. Beyond fraud prevention, KYC in South Africa plays a critical role in combating money laundering, terrorist financing, and other financial crimes. A failure to comply with the proper KYC measures could lead to hefty fines or even being shut down by the regulatory agencies.

In this guide, I will walk you through:

• KYC in South Africa, 
• Requirements needed, 
• Key steps to compliance, 
• Common challenges, and
• How to set up a system that works at scale with solutions like Dojah that suit your needs for KYC in South Africa.

KYC Requirements and FICA Compliance in South Africa

In South Africa, KYC processes are governed and enforced through the Financial Intelligence Centre Act 38 of 2001 (FICA).  KYC typically requires collecting government-issued IDs, proof of address, and biometric data to confirm that users are who they say they are.  

FICA is the foundation of the country’s anti-money laundering (AML) and counter-terrorist financing (CTF) regime. It mandates that all regulated entities implement strict customer due diligence procedures to identify and manage financial crimes. 

Who Must Comply With FICA?

FICA applies to a broad range of industries. If you operate in any of the sectors below, compliance is not optional:

• Banks and fintech companies
• Crypto platforms and payment processors
• Insurance firms
• Estate agents and car dealerships
• Law firms and attorneys
• Casinos and gambling providers
• Certain non-profit organizations

This means collecting and verifying key information such as:

• Government-issued identification (e.g., ID book, passport)
• Proof of residential address
• Biometric data (in some cases)

These steps ensure that customers are who they claim to be and that businesses can identify and report suspicious activity before it becomes a legal or financial risk.

What Happens If You Don’t Comply?

Non-compliance with FICA can lead to serious consequences, including:

• Administrative fines of up to R10 million
• Potential criminal prosecution
• Reputational damage and business disruption

Requirements for KYC in South Africa and Accepted Documents

Before you can onboard customers or launch financial services in South Africa, you need to understand the KYC requirements outlined under FICA. This includes knowing exactly what identity and address documents are accepted during verification. 

Here’s a breakdown of what your compliance team should request:

1. Proof of Identity

You must collect a valid, government-issued photo ID from every customer. 

 Accepted documents include:

• South African Smart ID Card – the most common ID used locally.
  
   
• Passport – valid for both residents and foreign nationals.
  
   
• Driver’s License – acceptable if it clearly shows the full name, date of birth, and photo.
  
   

2. Proof of Residential Address

To confirm where the customer lives, you’ll need a document that’s no older than 3 months.

 Accepted documents include:

• Utility bills – like water, electricity, or gas bills.
  
   
• Bank statements – showing the customer’s name and address.
  
   
• Lease or rental agreements – official agreements between landlord and tenant.

3. Business Verification Documents (for corporate accounts)

If you’re onboarding a business, you’ll need to verify the legal entity and its owners. 

 Key documents include:

• Company registration documents – to confirm legal existence.
  
   
• Proof of address for the business – usually a utility bill or lease.
  
   
• Details of Ultimate Beneficial Owners (UBOs) – those who own or control the business.
  
   
• Tax documents or source of funds declarations – to verify income or funding legitimacy.
  
   

4. Biometric and Digital Verification (where applicable)

Some platforms, especially those onboarding customers remotely, also use:

• Facial recognition – matching a selfie to the submitted ID.
  
   
• Fingerprint scans – supported by South Africa’s Smart ID system.
  
   

5. Income or Employment Verification (in certain sectors)

In some cases, especially for lending or investment services, you may also need:

• Payslips or employment letters – to verify stable income.
  
   
• Tax certificates – like IRP5s or SARS notices of assessment.
  
   

You don’t need all these documents for every use case. But at a minimum, proof of ID and address is essential. Additional documents depend on the customer type (individual vs business) and risk level.

How KYC Works in South Africa: Step-by-Step Process

Here’s what the typical KYC process looks like for fintechs, crypto platforms, and other regulated businesses operating in South Africa. From verifying identity documents to ongoing monitoring, these steps help ensure smooth onboarding, regulatory compliance, and risk management throughout the customer lifecycle:

• Step 1: Customer Identification
  Collect valid ID documents like a Smart ID, passport, or driver’s license. Digital KYC often includes facial recognition for extra security.
   
• Step 2: Screening and Risk Profiling
  Screen customers against sanctions, PEPs, and media lists. Categorize them as low, medium, or high risk based on results.
   
• Step 3: Customer Due Diligence (CDD)
  Gather information like income source, occupation, or ownership structure. High-risk profiles require deeper checks (EDD).
   
• Step 4: Ongoing Monitoring
  Regularly monitor transactions and update customer data. Adjust risk levels when behavior or circumstances change.
   
• Step 5: Record Keeping
  Maintain updated KYC records and make them available for audits or regulatory review.
   

• Step 6: Suspicious Activity Reporting (SAR)
  Flag and report unusual or suspicious transactions to the FIC promptly.

   

Digital/eKYC Trends in South Africa

In the first half of 2023, South Africa experienced a significant drop in identity fraud rates, from 17% in January to 8% by June, making it the lowest in the region. This decline shows how effective digital identity verification has become in reducing fraud.

Following the adoption of eKYC in South Africa, it’s now easier than ever to verify customer identities in South Africa. eKYC replaces paper-based verification with a fully digital system that uses biometric checks, AI-powered document scans, and real-time database matching to onboard customers faster and more securely.

The financial sector is leading this shift, adopting eKYC to speed up onboarding, cut costs, and stay compliant. The South African eKYC market is projected to grow at a CAGR of 22.7%, hitting USD 2.14 million by 2024.

As the country’s digital ecosystem grows, eKYC would continue to play a key role in improving user experience, enhancing security, and keeping businesses aligned with regulatory expectations.

Common Challenges with KYC Compliance in South Africa

From high compliance costs to slow onboarding, here are the key challenges South African businesses are facing when it comes to KYC: 

1. Regulatory Complexity and Enforcement Pressure

South Africa’s regulatory environment is complex and multi-layered, requiring businesses to comply with several authorities, including the South African Reserve Bank (SARB), Financial Sector Conduct Authority (FSCA), Financial Intelligence Centre (FIC), and National Credit Regulator (NCR). This makes compliance challenging, especially for startups. Enforcement is stricter than ever due to increased funding in the 2025 Budget for financial crime oversight, resulting in more audits and faster penalties.

 Recently, Old Mutual and HSBC were fined R15.9 million and R9.5 million, respectively, for failing to meet FICA obligations, underscoring the financial risks of weak KYC systems.

2. Rising Compliance Costs

Financial institutions in South Africa are grappling with escalating KYC-related expenses. On average, these institutions spend around $30 million annually on KYC processes, with 13% exceeding $50 million. The costs associated with client due diligence and onboarding have surged by 17% and 18%, respectively, over the past year, driven by intensified regulatory scrutiny and evolving AML regulations.

3. Inconsistent KYC Requirements and Documentation Burden

Corporate clients often express frustration over inconsistent KYC requirements across different banks, leading to delays and inefficiencies. Approximately 50% of corporate clients have reported spending significantly more time providing KYC documentation recently. This inconsistency not only hampers operational efficiency but also affects customer satisfaction.

4. Onboarding Delays and Customer Attrition

Lengthy and complex KYC processes contribute to poor customer experiences, with many users abandoning onboarding procedures. In South Africa, 74% of users abandon applications requiring multiple document uploads or repetitive data entry. These delays not only increase operational costs but also hinder financial inclusion efforts.

5. Escalating Fraud and Security Threats

The rise in digital banking has been accompanied by a surge in fraud incidents. In 2022, digital banking fraud in South Africa increased by 24% year-on-year, with banking app fraud incidents rising by 36%. Cybercriminals employ various tactics, including phishing, vishing, and social engineering, to exploit vulnerabilities in KYC processes.

How Dojah Simplifies KYC Compliance in South Africa

KYC compliance remains one of the top reasons startups in South Africa struggle to scale. Manual checks, high onboarding costs, and inconsistent ID requirements lead to drop-offs, delays, and compliance risks. In fact, 74% of users abandon onboarding when it’s too slow or complex. And the R15.9 million FICA fine handed to Old Mutual proves just how high the stakes can get.

From rising onboarding costs to inconsistent document requirements and strict regulatory pressure, it’s easy to get buried in manual processes and lose customers in the process. 74% of users abandon onboarding when it’s too lengthy or complex. And with penalties like the R15.9 million fine issued to Old Mutual for FICA non-compliance, the stakes are too high to ignore.

That’s where Dojah steps in. Dojah helps you stay compliant without losing speed, users, or sleep.

With Dojah, you can:

• Verify South African IDs in real time with facial recognition and liveness detection that stops impersonation fraud.
• Speed up onboarding with AI-powered document checks and automated AML screening.
• Easy developer integration means you can get started quickly without spending heavily on engineering resources.

👉  See how Dojah helped Mima to prevent fraudulent sign-ups and improve risk detection across its platform. 

South Africa’s regulatory landscape is tough, but Dojah simplifies it with automated AML checks and detailed verification logs. This gives startups peace of mind when complying with FIC, FSCA, SARB, and NCR requirements.

We typically see very high satisfaction rates amongst our users because we prioritize their needs and ease of use with our solutions

Ibukun Adeleke, Head of Client Operations at Dojah.

Whether you're a fintech, crypto exchange, or digital service provider, our all-in-one KYC infrastructure is built for teams that want faster onboarding, better fraud detection, and regulatory peace of mind.

👉 Book a demo to see how Dojah can work for your team.

Frequently Asked Questions About KYC in South Africa

What documents can I use for KYC?

You can use a South African Smart ID, passport, or driver’s license, along with a recent utility bill or bank statement for proof of address.

How does FICA affect my business?

FICA requires businesses to verify customer identities and report suspicious activity. It helps prevent fraud and ensures your business stays compliant with local laws.

Can KYC be done fully online?

Yes. With the right tools, businesses can verify identities, scan documents, and check watchlists entirely online without in-person steps.

What are the penalties for non-compliance?

Non-compliance can lead to fines up to R10 million, reputational damage, and even license suspension for serious cases.

Save Time and Reduce Churn with Dojah

If you’re a fintech startup or growing digital business in South Africa, looking to simplify your onboarding process, cut down fraud, and meet compliance without the friction, Dojah is built for you. Our KYC solutions are fast, localised, easy to integrate, and trusted by top African businesses.

 Book a demo to get started today.