SA’s digital economy is booming

For millions of South Africans, a mobile phone is far more than just a device – it is their social life, work and connection to the world. Mobile networks support financial transactions, online shopping, education, healthcare and access to essential services.

As South Africa becomes more digitally connected, protecting consumers in this environment has never been more important.

Traditionally, consumer protection in telecommunications focused on fair pricing, service quality and competition between providers. While these remain important, the rise of digital services has introduced new and far more complex risks for individuals. Today, consumer protection must also mean safeguarding identities, securing communication networks and maintaining trust in digital systems.

Criminals are increasingly using telecoms systems to carry out scams such as phishing attacks, impersonation schemes and Sim-swap fraud. In these scams, fraudsters trick individuals into sharing sensitive information or manipulate phone systems to gain access to bank accounts and other services.

According to the Communications Risk Information Centre, telecoms-linked fraud costs South Africa about R5.3-billion each year, with nearly 60% of mobile banking fraud linked to SIM-swap attacks.

Recent banking sector figures paint an equally concerning picture. Digital banking fraud incidents in South Africa have surged, with reported cases rising sharply and losses increasing by 74% in 2024 to around R1.9-billion, according to the South African Banking Risk Information Centre’s annual crime statistics report.

Growing threat

Many victims of this type of crime experience emotional distress, spend months trying to recover their accounts and suffer long-lasting damage to their trust in digital services. This growing threat is reflected in broader industry data. A TransUnion analysis also found that telecoms, financial services and online communities were among the sectors with the highest levels of suspected digital fraud exposure in South Africa in 2024.

As digital services continue to expand, the increasing use of telecoms infrastructure in fraud schemes is becoming a central consumer protection challenge.

Read: Sim crime goes industrial as fraudsters target South Africa’s digital economy

Because many digital services rely on mobile phone numbers for verification, the networks have become a frontline defence in the broader fight against digital fraud. If criminals can obtain fraudulent registered Sim numbers, it becomes far easier for them to operate impersonation scams, bypass authentication safeguards and avoid detection altogether.

This is why South Africa, like many countries worldwide, introduced Sim registration requirements through legislation such as Rica. In fact, more than 160 countries now mandate Sim card registration tied to a verified identity, and over 35 of those nations have added biometric checks such as fingerprints or facial scans to strengthen verification.

The purpose is to protect consumers by reducing the anonymity that allows digital fraud to flourish. When communication channels are traceable, it becomes easier to identify criminals who use mobile networks to target victims and hold them accountable.

However, the current system is not without its challenges. As digital fraud becomes more sophisticated, criminals are finding new ways to exploit weaknesses in identity verification processes. Stolen or forged identity documentation can be used to register Sim cards and gaps in verification systems can be exploited by fraudsters. This means the effectiveness of Sim registration systems depends heavily on the reliability of the broader identity ecosystem.

Another challenge is that many verification processes still rely on manual checks. In many retail stores, the staff visually inspect identity documents before registering a Sim card. While this approach works in many cases, it is often ineffective against sophisticated forgery or synthetic identities, which can appear valid to the naked eye.

But digital fraud is not confined to any single sector or systems. In many cases, criminals exploit weaknesses across sectors. This reality has led experts to recognise that digital fraud is a cross-sector problem. Telecoms providers, financial institutions and digital platforms all play a role in preventing scams and protecting consumers. When these sectors work together, they can share information about emerging threats and coordinate responses to fraud more effectively.

Despite these challenges, it is important to recognise that network operators are not investigative authorities. Their role is to follow legal requirements and verify customer information during the registration process. They do not have the power to investigate crimes or track criminals independently. Instead, their responsibility is to ensure that communication networks remain traceable and accountable.

Broader purpose

Public discussions about Sim registration sometimes focus heavily on concerns about surveillance and privacy. While privacy is an important consideration, it is equally important to understand the broader purpose of these systems. Sim registration exists to prevent abuse of communication networks and protect consumers from fraud and impersonation. Without some form of credible identification process, criminals could operate anonymously, making it far harder for authorities to trace those responsible.

Another important issue in our country is digital inclusion. Many people still face barriers in accessing formal identification or digital services. If registration systems become too complicated, they risk excluding legitimate users from essential communication services.

Read: Sim card insanity in South Africa

Policymakers must therefore balance security with accessibility. The goal should not be to weaken consumer protection systems, but to modernise them so they remain effective while ensuring all South Africans can participate in the digital economy.

The future of consumer protection in telecoms will depend on stronger collaboration across industries. Telecoms providers, banks, regulators and technology platforms all have a shared interest in reducing digital fraud. By sharing information, improving verification technologies and coordinating responses to emerging threats, these sectors can build a more secure digital environment for consumers.

Ultimately, protecting consumers in the digital age requires more than traditional regulatory approaches. It calls for recognising that communication networks are an integral part of the country’s broader digital infrastructure ecosystem. When this ecosystem is secure, it enables economic activity, supports financial services and facilitates social participation.

Telecoms operators are not passive participants in this ecosystem. They have increasingly adopted a proactive and evolving approach to closing gaps within the Rica framework. Recognising that static compliance is insufficient against dynamic fraud risks, operators have been actively implementing enhanced verification measures, strengthening internal controls and working collaboratively across the value chain to identify and address vulnerabilities in Sim registration processes.

Importantly, these efforts are often undertaken within constrained legislative parameters, requiring operators to innovate within the bounds of existing law while advocating for modernisation where gaps persist. This more assertive posture reflects a clear shift: from compliance-driven obligations to a deliberate, consumer-centric approach aimed at reducing fraud exposure and protecting the integrity of South Africa’s digital ecosystem.

As digital fraud continues to evolve, the systems designed to protect consumers must evolve as well. Modernising identity verification processes, improving coordination across sectors and strengthening oversight mechanisms will all be essential steps.

Consumers need to be confident that the communication systems they rely on every day are secure and responsibly managed. The telecoms sector continues to take proactive steps to strengthen safeguards around consumer protection and communications networks, helping to ensure that the country’s growing digital economy remains safe, inclusive and resilient for everyone.

• The author, Nomvuyiso Batyi, is CEO of the Association of Comms & Technology, whose members are Vodacom, MTN, Telkom, Cell C, Rain and Liquid Intelligent Technologies