What is the RBI’s Payments Infrastructure Development Fund, or PIDF scheme?

The Payments Infrastructure Development Fund (PIDF) scheme that came into effect in January 2021 aimed at increasing the number of payment acceptance devices multifold in the country. With the operationalisation of the scheme, acquiring banks, non-banks, and merchants are seen to benefit due to lower overall acceptance infra cost. 

Purpose of the PIDF scheme

To strengthen the payment acceptance infra by including 30 lakh touch points, which includes 10 lakh physical and 20 lakh digital payment devices every year.

Timeline of the scheme

The scheme was initially launched for 3 years from January 1, 2021, with the option of an extension for 2 more years.

The PIDF scheme targets some specified geographies.

The scheme shall target

• Creation of payment acceptance infra in Tier-3 to Tier-6 centres
• The scheme shall also cover eligible street vendors who are part of the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme) in Tier-1 and Tier-2 centres.
• The North Eastern states, together with the UTs of J&K and Ladakh, shall be given special attention.
• Merchants that do not have any payment acceptance infra

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PIDF or Payments Infrastructure Development Fund 

In light of the evolving payments ecosystem in the country, the apex bank, the Reserve Bank of India (RBI), came up with the Payments Infrastructure Development Fund (PIDF) in June 2020.

The purpose of the fund was to push acquirers to deploy PoS terminals, both physical as well as online, in tier-3 to tier-6 centres together with North Eastern states. As per the press release concerning the creation of the fund, the initial contribution to the tune of Rs 250 crore will be made by the RBI.

Changes to the PIDF scheme in the RBI’s October MPC

Considering the boost the scheme provided to the payments infra in the country, the RBI today decided to extend the scheme by 2 more years, i.e., until December 31, 2025. “Since its launch in January 2021, the Payments Infrastructure Development Fund (PIDF) Scheme has enabled over 2.66 crore new payment touch points across the country,” read the RBI Governor’s statement.

Also, the RBI expanded the scope of the scheme to include the beneficiaries of the PM Vishwakarma Scheme.

Further, the scheme shall also work to install advanced payment acceptance devices, including a soundbox and Aadhaar-enabled biometric payment acceptance devices. These steps will gear up the RBI’s efforts to bolster digital payments at the grass-roots level.

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