RBI sets up Payments Infrastructure Development Fund (PIDF)

The Reserve Bank of India broadcasts the setting up a Payment Infrastructure Development Fund (PIDF) of Rs 500 crore to encourage acquirers to deploy Points of Sale (PoS) infrastructure, both physical as well as digital modes in tier-3 to tier-6 centres and northeastern states. The fund has been created to provide further fillip to digitisation of payment systems, it said. As per the announcement, Reserve Bank has made an initial contribution of Rs.250 crore covering half the fund. The remaining will come from the card-issuing banks and card networks operating in the country. The PIDF will also receive recurring contributions to cover operational expenses for deepening digital payment infrastructure from card-issuing banks and card networks. The Reserve Bank will also contribute to yearly shortfalls, if necessary. The PIDF will be governed through an Advisory Council and managed and administered by Reserve Bank.

“Over the years, the payments ecosystem in the country has evolved with a wide range of options such as bank accounts, mobile phones, cards, etc. To provide further fillip to digitisation of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in underserved areas,” it said.

The vision 2021 of RBI focuses on further enhancements/improvements in all facets of payment systems. The vision document had estimated that by 2021, there will be around 5 million active PoS by 2021. The document had envisaged that the usage of debit cards at PoS transactions will be around 44 per cent of total debit card transactions by 2021. Increased deployment of card acceptance infrastructure across the country including at smaller centres with a substantial portion of the infrastructure taking care of processing contactless card payments, the vision document said. The enhanced ability of PoS infrastructure is likely reducing the demand for cash over time.