Payments Infrastructure Development Fund Scheme
Source: CNBC
GS III: Economy
Overview
- News in Brief
- About Payments Infrastructure Development Fund Scheme
Why in the News?
The Reserve Bank of India (RBI) recently extended the Payments Infrastructure Development Fund (PIDF) scheme till December 31, 2025.
News in Brief
- The Reserve Bank of India (RBI) has announced an extension of the Payments Infrastructure Development Fund (PIDF) scheme until December 31, 2025.
- Initially launched in 2021 for three years, this extension aims to continue fostering financial inclusion and supporting the country’s payment infrastructure.
- Under this extended scheme, beneficiaries of the PM Vishwakarma Scheme nationwide have been incorporated as merchants eligible for deployment under PIDF.
About Payments Infrastructure Development Fund Scheme
- The Scheme was operationalized by the RBI in 2021 for three years (extendable up to 2 years) to encourage the deployment of payment acceptance infrastructure in India.
- The infrastructure includes physical Point of Sale (PoS) terminals, Quick Response (QR) codes, in tier-3 to tier-6 centers, North Eastern states and Union Territories (UTs) of Jammu & Kashmir and Ladakh.
- The objective of PIDF is to increase the number of acceptance devices multi-fold in the country.
- The Scheme is expected to benefit the acquiring banks / non-banks and merchants by lowering overall acceptance infrastructure costs.
Validity Period and PIDF Target
- Three years from January 01, 2021, extendable by two further years, if necessary.
- Increasing payment acceptance infrastructure by adding 30 lakh touch points – 10 lakh physical and 20 lakh digital payment acceptance devices every year.
Corpus
- The initial corpus of PIDF has to be substantial to initiate pan-India terminalisation and to cover the payouts in the first year.
- Contributions to the PIDF shall be mandatory for banks and card networks.
- RBI shall contribute ₹250 crore to the corpus; the authorised card networks shall contribute in all ₹100 crore.
- The card-issuing banks shall also contribute to the corpus based on the card issuance volume (covering both debit cards and credit cards) at the rate of ₹1 and ₹3 per debit and credit card issued by them, respectively.
- It shall be the endeavour to collect the contributions by January 31, 2021.
- Any new entrant to the card payment eco-system (card issuer and card network) shall contribute an appropriate amount to the PIDF.
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