South Africa's digital economy is booming

for millions of people For South Africans, the mobile phone is more than just a device – it is their social life, work and connection to the world. Mobile networks support financial transactions, online shopping, education, health care 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 has focused on fair pricing, service quality, and competition among providers. While these remain important, the rise of digital services has introduced new and far more complex risks to individuals. Today, consumer protection must also mean protecting identity, securing communications networks and maintaining trust in digital systems.

Criminals are increasingly using telecommunications 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 Communications Risk Information CenterTelecom fraud costs South Africa approximately R5.3 billion each year, with approximately 60% of mobile banking fraud linked to SIM-swap attacks.

Recent figures from the banking sector also present an equally worrying picture. Incidences of digital banking fraud have increased in South Africa, with reported cases rising rapidly and losses rising 74% to almost R1.9-billion in 2024. South African Banking Risk Information Center Annual Crime Statistics Report.

increasing danger

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

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

Reading: SIM crime goes industrial as fraudsters target South Africa's digital economy

Since many digital services rely on mobile phone numbers for verification, the networks have become the front line of defense in the widespread fight against digital fraud. If criminals can obtain fraudulently registered SIM numbers, it becomes easier for them to conduct impersonation scams, bypass authentication security measures, and avoid detection altogether.

This is why South Africa, like many countries around the world, introduced SIM registration requirements through legislation like Ricoh. In fact, over 160 countries now mandate SIM card registration with verified identity, and over 35 of them have added biometric checks like fingerprints or facial scans to strengthen verification.

It aims to protect consumers by reducing the anonymity that allows digital fraud to flourish. When communication channels can be traced, 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 documents can be used to register SIM cards and gaps in verification systems can be exploited by fraudsters. This means that the effectiveness of SIM registration systems depends largely on the reliability of the wider identity ecosystem.

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

But digital fraud is not limited to any one sector or system. In many cases, criminals take advantage of vulnerabilities in various areas. This reality has led experts to believe that digital fraud is a cross-sector problem. Telecommunications 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 more effectively coordinate responses to fraud.

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

broad objective

Public discussion about SIM registration sometimes focuses 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 misuse of communications networks and to protect consumers from fraud and impersonation. Without some kind of reliable identification process, criminals can operate anonymously, making it very difficult for authorities to trace those responsible.

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

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Policy makers must therefore balance security with accessibility. The goal should not be to weaken consumer protection systems, but to modernize them so that they remain effective and ensure that all South Africans can participate in the digital economy.

The future of consumer protection in telecommunications will depend on strong collaboration between the industries. Telecom providers, banks, regulators and technology platforms all have a common interest in reducing digital fraud. By sharing information, improving verification technologies, and coordinating responses to emerging threats, these sectors can create a more secure digital environment for consumers.

Ultimately, protecting consumers in the digital age requires more than a traditional regulatory approach. This requires recognizing that communications 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.

Telecom operators are not passive participants in this ecosystem. They have adopted a proactive and progressive approach to closing the gaps within the RIKA framework. Recognizing that static compliance is insufficient against dynamic fraud risks, operators are actively implementing enhanced verification measures, strengthening internal controls and working collaboratively across the value chain to identify and address weaknesses in SIM registration processes.

Importantly, these efforts are often undertaken within limited legislative parameters, requiring operators to innovate within the bounds of existing legislation while advocating modernization where gaps remain. This more assertive posture reflects a clear shift: away from compliance-driven obligations towards a deliberate, consumer-focused approach that aims to reduce the risk of fraud and protect the integrity of South Africa's digital ecosystem.

As digital fraud evolves, systems designed to protect consumers must also evolve. Modernizing identity verification processes, improving coordination across sectors and strengthening oversight mechanisms will all be necessary steps.

Consumers need to be assured that the communications systems they rely on every day are secure and responsibly managed. The telecom sector is taking proactive steps to strengthen consumer protection and security measures around communications networks, helping to ensure that the country's growing digital economy remains secure, inclusive and resilient for all.

• Author, Nomvuyiso BatyiHe is the CEO of the Association of Comms and Technology, whose members include Vodacom, MTN, Telkom, Cell C, Rain and Liquid Intelligent Technologies.