Skip to main content

What is Payments Infrastructure Development Fund (PIDF)?

Reserve Bank of India (RBI) has created Payments Infrastructure Development Fund (PIDF) to give impetus to acceptance infrastructure across the country.

What is Payments Infrastructure Development Fund (PIDF)?

The Payments Infrastructure Development Fund (PIDF) Scheme, operationalised by Reserve Bank of India (RBI) from January 01, 2021, subsidies and encourage deployment of Points of Sale (PoS) infrastructure (physical and digital modes) in the country.

What is the basis of creating PIDF?

In May 2019, the High-Level Committee on Deepening of Digital Payments (Chairman: Shri Nandan Nilekani, former Chairman, UIDAI) set up by RBI, had recommended setting up of an 'Acceptance Development Fund 'to be used for improving acquiring infrastructure at Tier IV, V and VI areas which will ensure optimum utilisation of millions of cards issued to customers, resulting in increased digitisation in these deficit centres.

What is the validity period of PIDF?

The validity period of PIDF is 3 years from January 01, 2021, extendable by 2 further years, if necessary.

What is the target under PIDF?

The target of PIDF is to increase the payments acceptance infrastructure by adding 30 lakh touch points every year (10 lakh physical and 20 lakh digital payment acceptance devices).

Which devices are included under physical and digital touch points?

  • Physical devices include PoS, mPoS (mobile PoS), GPRS (General Packet Radio Service), PSTN (Public Switched Telephone Network), etc.
  • Digital devices include inter-operable QR code-based payments such as UPI QR, Bharat QR, etc.
What are target geographies under PIDF?
  • The primary focus is to create payment acceptance infrastructure in Tier-3 to Tier-6 centres.
  • In addition to the street vendors in tier-3 to tier-6 centres, the Scheme also includes eligible street vendors covered under PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme) in Tier-1 and Tier-2 centres as beneficiaries.
  • North-Eastern states of the country and Union Territories of Jammu and Kashmir, and Ladakh (UTs of J & K and Ladakh) are given special focus.
  • While setting parameters for utilisation of funds, the focus is to target those merchants who are yet to be terminalised (merchants who do not have any payment acceptance device). Such merchants may be acquired for one physical and one digital acceptance device each under the Scheme.
  • Merchants providing essential services (transport, hospitality, etc.), government payments, fuel pumps, PDS shops, healthcare, kirana shops, street vendors, etc., may be covered, especially in the targeted geographies.
  • Payment methods that are not inter-operable are not considered under PIDF.
  • The tentative distribution of targets across centers is as follows –
Distribution of Acceptance Devices % Share of Total
Tier-1 to Tier-4 centres 30
Tier-5 and Tier-6 centres 60
North-Eastern States and UTs of J & K and Ladakh 10

What is the governance structure of PIDF?

PIDF is governed by an ex-officio Advisory Council (AC), which is presently chaired by Shri T Rabi Sankar, Deputy Governor, RBI.

Who contributes to the corpus of PIDF?

PIDF was created with an initial contribution of ₹250 crores from RBI, ₹100 crores from the authorised card networks, and contribution from card issuing banks based on the card issuance volume at the rate of ₹1 and ₹3 per debit and credit card issued by them, respectively.

Besides the initial corpus, the PIDF also receives annual contribution as under –

  • Authorised card networks (turnover based) – 1 basis point (bps) i.e., 0.01 paisa per Rupee of transaction.
  • Card issuing banks (turnover based) – 1 bps and 2 bps i.e., 0.01 paisa and 0.02 paisa per Rupee of transaction for debit and credit cards respectively; also at the rate of ₹1 and ₹3 for every new debit and credit card issued by them respectively during the year.
  • RBI contributes to yearly shortfalls, if any.

The contribution is collected by January 31st and July 31st based on card data of December 31st and June 30th respectively.

As per the RBI Press Release dated February 03, 2023, the corpus of PIDF stands at ₹788.20 crore as on December 31, 2022.

Which expenses are covered under PIDF?

  • Subsidy is granted on a quarterly basis.
  • Initially 75% of the subsidy amount is released and the balance 25% is released later after ensuring that performance parameters are achieved, including conditions for ‘active’ status of the acceptance device and ‘minimum usage’ criteria, subject to the status of the acceptance device being active in 3 out of the 4 quarters of the ensuing year.
  • The minimum usage is termed as 50 transactions over a period of 90 days and active status is minimum usage for 10 days over the 90-day period.

How can claims be submitted under PIDF?

  • The scheme is on reimbursement basis; accordingly, the claim is to be submitted only after making payment to the vendor.
  • Maximum cost of physical acceptance device eligible for subsidy – ₹10,000 (including one-time operating cost up to a maximum of ₹500).
  • Maximum cost of digital acceptance device eligible for subsidy – ₹300 (including one-time operating cost up to a maximum of ₹200).
  • Subsidised amount of cost of physical and digital payment acceptance devices based on location of deployment is as under –

Location
Physical payment acceptance device
(% of total cost)
Digital payment acceptance device
(% of total cost)
Tier-1 to Tier-4 centres 60 75
Tier-5 and Tier-6 centres, North-Eastern States and UTs of J & K and Ladakh 75 90

How is implementation of targets monitored under PIDF?

  • Implementation of targets under PIDF is monitored by RBI with assistance from Card networks, Indian Banks’ Association (IBA) and Payments Council of India (PCI).
  • Acquirers need to submit quarterly deployment reports on achievement of targets to RBI.
  • Acquirers, meeting / exceeding their targets well in time and / or ensure greater utilisation of acceptance devices in terms of transactions, are incentivised by scaling up the extent of reimbursement of subsidy as follows –


References

Reserve Bank of India. (2019, May 17). 'Report of the High Level Committee on Deepening of Digital Payments'. Retrieved from https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/CDDP03062019634B0EEF3F7144C3B65360B280E420AC.PDF

Reserve Bank of India. (2019, October 04). 'Statement on Developmental and Regulatory Policies'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=48318

Reserve Bank of India. (2020, June 05). 'RBI announces creation of Payments Infrastructure Development Fund'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49905

Reserve Bank of India. (2021, January 05). 'Operationalisation of Payments Infrastructure Development Fund (PIDF) Scheme (Updated as on June 09, 2022)'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12009&Mode=0

Reserve Bank of India. (2021, August 26). 'Payments Infrastructure Development Fund – Inclusion of PM SVANidhi Scheme beneficiaries'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=52112#

Reserve Bank of India. (2021, November 16). 'Payments Infrastructure Development Fund (PIDF) – Status Update'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=52571

Reserve Bank of India. (2022, June 09). 'Payments Infrastructure Development Fund (PIDF) – Status Update'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53843

Reserve Bank of India. (2023, February 03). 'Payments Infrastructure Development Fund (PIDF) – Status Update'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55153


Follow at - Telegram   Instagram   LinkedIn   Twitter

Comments

Popular Posts

Highlights of RBI Annual Report 2023-24 – Chapter 7 to 12

Reserve Bank of India (RBI) has published its annual report for the financial year 2023-24. In a series of articles, we will go through the highlights of the report. This is the fifth and last article in the series.  Chapter 7 – Public Debt Management Ways And Means Advances (WMA) limit for the Government of India (GoI) for H1:2023-24 (April to September 2023) was fixed at ₹1,50,000 crore and for H2:2023-24 (October 2023 to March 2024) was fixed at ₹50,000 crore. RBI issued an ultra-long security of 50-year tenor aggregating ₹30,000 crore to cater to the growing needs of long-term institutional players. Issuance of Sovereign Green Bonds (SGrBs) for an aggregate amount of ₹20,000 crore included maiden issuance of 30-year (₹10,000 crore) SGrB in addition to 5-year (₹5,000 crore) and 10-year (₹5,000 crore) SGrBs. A new 3-year benchmark security was introduced as part of government market borrowing programme during H1:2023-24.  The basket of products offered through the ‘Retail ...

Lending against Gold and Silver collateral

Reserve Bank of India (RBI) has issued directions on lending against the collateral of gold and silver. To whom are the directions applicable? The directions are applicable to the following regulated entities (REs) – Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks, but excluding Payments Banks). Primary (Urban) Co-operative Banks (UCBs) & Rural Co-operative Banks (RCBs), i.e., State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs). Non-Banking Financial Companies (NBFCs), including Housing Finance Companies (HFCs). Which loans are covered under the directions? The directions shall apply to all loans offered by an RE for the purpose of consumption or income generation (including farm credit) where eligible gold or silver collateral is accepted as a collateral security. What is eligible collateral? Eligible collateral means the collateral of jewellery, ornaments or coins made of gold or silver. A lender shall not grant any ad...

Prior approvals from or intimations / reporting to RBI by NBFC-BL

Non-Banking Financial Companies (NBFCs) are required to obtain prior approvals from Reserve Bank of India (RBI) or intimate / report to RBI various events. This article lists out some of such important events where prior approvals or intimations / reporting is required for Base Layer NBFCs (NBFC-BL). Events requiring prior approval from RBI  Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 dated October 19, 2023 Para 30 – NBFCs shall prepare its balance sheet and profit and loss account as on March 31 every year. Whenever an NBFC intends to extend the date of its balance sheet as per provisions of the Companies Act, 2013, it shall take prior approval of RBI before approaching the Registrar of Companies for this purpose. Even in cases where RBI and the Registrar of Companies grant extension of time, the NBFC shall furnish to RBI a proforma balance sheet (unaudited) as on March 31 of the year and the statutory returns ...

RBI’s Monetary Policy (June 06, 2025): In A Nutshell

The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on June 06, 2025. Here are some of the highlights of the monetary policy announcement. Rates   Change Rate Policy repo rate Reduced by 0.50% 5.50% Standing deposit facility (SDF) rate 5.25% Marginal standing facility (MSF) rate 5.75% Bank rate 5.75% Monetary policy stance Monetary policy stance was changed from ‘accommodative’ to ‘neutral’. Domestic Economy  The Indian economy presents a picture of strength, stability, and opportunity. The 5x3x3 matrix of fundamentals provides the necessary core strength to cushion the Indian economy against global spillovers and propel it to grow at a faster pace.  First, strength comes from the strong balance sheets of the 5 major sectors - corporates, banks, households, government, and the external sector.  Second, there is stability on all 3 fronts – price, financial, and political – providing policy and economic certainty.  Third, the Indian ec...

What is KYC?

Be it opening a new bank account, applying for a new credit card, registering for new e-wallet, or any other account or facility involving financial matters, the application process is incomplete until KYC is done.  What is KYC? KYC or Know Your Customer is a process of customer identification and verification while opening an account or undertaking a financial transaction. Why is KYC process needed? To prevent money laundering To combat financing of terrorism What is verified under KYC? The banks / financial institutions collect the relevant documents from the customers to verify the following – Proof of identity Proof of address Which documents can be collected for KYC? As per RBI’s Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on May 10, 2021), “Officially Valid Document” (OVD) means – Passport Driving licence Proof of possession of Aadhaar number Voter's Identity Card issued by the Election Commission of India Job card issued by NREGA duly signed by an...