Smart ID cards could be in use by the next general election, Home Affairs Minister Nkosazana Dlamini-Zuma said in Pretoria on Thursday.
She said some South Africans would be using the smart card instead of the green identity book by 2014.
"The IEC [Independent Electoral Commission] is aware of the process and they are making sure that they are ready."
She said the aim of a pilot project, currently underway, was to test how accurate the new system was, and whether it was ready for the phase-in stages.
A national identity system would capture biometric and biographic details of all South Africans and foreign nationals.
In the next 18 months of the pilot project, the department would start issuing the smart cards to all first-time applicants, Dlamini-Zuma said. Later, the department would recall the green identity books to replace them with smart cards.
Dlamini-Zuma said discussions were underway with the department of transport regarding merging the drivers' licence card with the smart card.
At the moment the idea was not feasible as drivers' licences had to be renewed every five years, while the smart ID card could be used for up to 10 years without needing to be replaced.
Unlike waiting for weeks or months for a green ID book, it would take several days after an application had been made for a person to get their card.
The most time-consuming element of the process would be sorting cards for various provinces after printing them, and then sending them back to the centres where applications had been made.
Banks, businesses or other credit providers who needed people's identity details would have to purchase small verification machines. These would scan a person's fingerprint, allowing the user to determine if the person was the card's rightful owner.
The verification machines would cost between R30 and R100, depending on the level of sophistication. Police or metro police would have mobile versions of the devices.
Dlamini-Zuma said it would be useless to steal someone's smart identity card. The thief would not be able to use it since the fingerprints would not match.
The smart cards had "hidden" security measures which would make duplication impossible, the minister said.
"There is no way you can duplicate this card; trying to forge the card would be a nightmare."
Another security feature of the card would be an embedded photo of the carrier that could not be replaced or changed, Dlamini-Zuma said.