In a strategic move to fortify the digital payment ecosystem, the Reserve Bank of India (RBI) has announced a two-year extension of the Payments Infrastructure Development Fund (PIDF) scheme, now slated to run until December 2025. Launched in 2021 with an initial three-year term, the PIDF scheme seeks to stimulate the deployment of digital payment infrastructure, including point-of-sale (PoS) terminals and QR codes, with a focus on tier III to VI centers and special regions such as North Eastern states and Union Territories of Jammu & Kashmir and Ladakh.
The extended PIDF scheme incorporates several enhancements, expanding its scope and inclusivity. Key modifications include:
- Inclusion of Sound Box Devices and Aadhaar-enabled Biometric Devices:
- Devices such as sound box devices and Aadhaar-enabled biometric devices are now eligible for subsidies under the PIDF scheme, fostering a more diverse range of digital payment infrastructure.
- Uniform Subsidy Rate for North Eastern States and UTs of J&K and Ladakh:
- The subsidy rate for the specified regions has been standardized at 90% of the device cost, streamlining support for digital payment infrastructure development.
- Integration of ‘PM Vishwakarma’ Scheme Beneficiaries:
- Merchants benefiting from the government’s flagship ‘PM Vishwakarma’ scheme are now included in the PIDF scheme, broadening the reach of this initiative.
According to RBI’s statement, as of November 2023, a total of 8.27 Lakh physical devices (PoS and mPoS terminals) and 2.71 Cr digital devices (UPI QR and Bharat QR) have been deployed under the PIDF scheme. The corpus of the fund currently stands at INR 1,026.37 Cr as of November.
The PIDF scheme receives contributions from the RBI, authorized card networks, and card-issuing banks, forming an integral part of its financial foundation.
This extension aligns with RBI’s commitment to promoting digital transactions at the grassroots level, leveraging industry feedback to accelerate and amplify the deployment of digital payment acceptance infrastructure in targeted areas.
As the United Payments Interface (UPI) continues to showcase robust performance, surpassing 11 Bn transactions in November 2023, this extension reinforces RBI’s dedication to fostering a digital-first economy. The central bank’s recent initiatives, such as the raised limit for UPI payments to hospitals and educational institutions to INR 5 Lakh per transaction, underscore its proactive stance in propelling the growth of the digital payments landscape.
