Payment Infrastructure Development Fund Scheme

Table of Contents

PIDF scheme UPSC: Relevance

GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Recently, RBI has proposed enhancing subsidy amount and simplifying claim process under the Payments Infrastructure Development Fund (PIDF) scheme.

Objective: To further accelerate and augment the deployment of payment acceptance infrastructure in targeted geographies.
As of end-April 2022, more than 1 crore new touch points have been deployed under the scheme.
Experts said that the modification proposed will lead to more players setting up payment infrastructure.
Enhancing the subsidy amount and simplifying the subsidy claim process will encourage more players to set up merchant acquiring services like POS and QR.

The Payment Infrastructure Development Fund (PIDF) Scheme was operationalised by the central bank in January 2021 to incentivise deployment of Point-of-Sale machines (PoS), mPoS (mobile PoS), Quick Response (QR) codes in tier-3 to tier-6 centres and North Eastern States.
From August 2021, beneficiaries of PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme) in tier-1 and tier-2 centres were also covered.
A subsidy of 30% to 50% of cost of physical PoS and 50% to 75% subsidy for Digital PoS is offered under the scheme.
The initial target of the scheme was 90 lakh PoS terminals and Quick Response (QR) codes to be deployed over three years, or 2023 end.
The target was achieved before deadline and as on April end, over 1 crore new touch points have been deployed under the Scheme.
The PIDF corpus currently stands at ₹811.4 crore, with an initial authorised capital of 250 crore by the RBI.
An advisory council under the chairmanship of RBI deputy governor BP Kanungo had been constituted for managing the PIDF.
The fund will be operational for three years effective from January 1, 2021 and may be extended for two more years.

The minimum usage, to be eligible for subsidy, shall be termed as 50 transactions over a period of 90 days and active status shall be minimum usage for 10 days over the 90-day period.
The subsidy claims shall be processed on a half-yearly basis and 75% of the subsidy amount shall be released.
The balance 25% shall be released later subject to the status of the device being active in three out of the four quarters of the ensuing year.
The maximum cost of physical acceptance devices eligible for the subsidy will be Rs 10,000, including one-time operating costs up to Rs 500.
The maximum cost of digital acceptance devices eligible for subsidy will be Rs 300, including a one-time operating cost up to Rs 200.