Payments Infrastructure Development Fund (PIDF) Scheme Operationalised

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PIDF is intended to subsidise deployment of payment acceptance infrastructure in Tier-3 to Tier-6 centres with special focus on North Eastern States of the country. It envisages creating 30 lakh new touch points every year for digital payments. 2. The framework of PIDF is enclosed ( Annex – I ). An Advisory Council (AC), under the Chairmanship of the Deputy Governor, RBI, has been constituted for managing the PIDF. PIDF will be operational for a period of three years from January 01, 2021 and may be extended for two more years depending upon the progress. PIDF presently has a corpus of ₹345 crore (₹250 crore contributed by RBI and ₹95 crore by the major authorised card networks in the country). 3. All stakeholders are requested to co-operate in this endeavour by – (a) making their contributions to PIDF within the timelines, and (b) deploying acceptance infrastructure and seeking reimbursement from PIDF. 4. These directions are issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007). Yours faithfully, (P Vasudevan) Chief General Manager Annex - I Payments Infrastructure Development Fund (PIDF) Scheme 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 cost. 1. Validity Period and PIDF Target 1.1 Three years from January 01, 2021, extendable by two further years, if necessary. 1.2 Increasing payments acceptance infrastructure by adding 30 lakh touch points – 10 lakh physical and 20 lakh digital payment acceptance devices every year. 2. Governance Structure of PIDF 2.1 PIDF shall be governed by an ex-officio Advisory Council (AC). 2.2 Composition of the AC: – Shri T Rabi Sankar * , Deputy Governor, Reserve Bank of India; Shri Sunil Mehta, Chief Executive, Indian Banks’ Association; Shri J S Upadhayay † , Chief General Manager, DFIBT, NABARD; Shri Dilip Asbe, Chief Executive Officer, National Payments Corporation of India; Shri Vishwas Patel, Chairman, Payments Council of India; Shri Shailesh Paul, Vice President and Head Merchant Sales and Solutions, Visa; Shri Vikas Saraogi ‡ , Vice President Business Development, Mastercard; Shri R Vittal Raj, Chartered Accountant, Kumar & Raj Chartered Accountants; and Shri Ajay Michyari, Regional Director, Reserve Bank of India, Mumbai Regional Office (Administrator of PIDF). The Chief General Manager, Department of Payment & Settlement Systems, Reserve Bank of India shall function as the Secretariat to the AC. 2.3 The AC may constitute sub-committees to look into different aspects of the PIDF, as required. 2.4 The AC may co-opt members at its discretion. 2.5 AC shall devise suitable rules for operating the PIDF. 3. Target Geographies 3.1 The primary focus shall be to create payment acceptance infrastructure in Tier-3 to Tier-6 centres. 3.2 The Scheme shall include eligible street vendors covered under PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme) in Tier-1 and Tier-2 centres. 3.3 North Eastern states of the country and Union Territories of Jammu and Kashmir, and Ladakh (UTs of J & K and Ladakh) shall be given special focus. 3.4 While setting parameters for utilisation of funds, the focus shall be 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. 3.5 The AC shall devise a transparent mechanism for allocation of targets to acquiring banks / non-banks in different segments / locations. 3.6 The tentative distribution of targets across centres will be as follows: Distribution of Acceptance Devices % Share of Total Tier-3 to Tier-4 centres 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 4. Market Segments and Merchant Categories 4.1 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. 5. Types of Acceptance Devices Covered 5.1 Multiple payment acceptance devices / infrastructure supporting underlying card payments, such as physical PoS, mPoS (mobile PoS), GPRS (General Packet Radio Service), PSTN (Public Switched Telephone Network), QR code-based payments, etc. 5.2 As the cost structure of acceptance devices vary, subsidy amounts shall accordingly differ by the type of payment acceptance device deployed. A subsidy of 30% to 50% of cost of physical PoS and 50% to 75% subsidy for Digital PoS shall be offered. A subsidy of 60% to 75% of cost of physical PoS and 75% to 90% for Digital PoS shall be offered. 5.3 Payment methods that are not inter-operable shall not be considered under PIDF. 5.4 The subsidy shall not be claimed by applicant from other sources like NABARD, etc. In case other mechanisms exist for providing subsidy or reimbursing cost of deployment of acceptance infrastructure, no reimbursement shall be claimed from PIDF therefor. 6. Initial Corpus 6.1 Initial corpus of PIDF has to be substantial to initiate pan-India terminalisation and to cover the pay-outs in the first year. Contributions to the PIDF shall be mandatory for banks and card networks. 6.2 RBI shall contribute ₹250 crore to the corpus; the authorised card networks shall contribute in all ₹100 crore. 6.3 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. 6.4 It shall be the endeavour to collect the contributions by January 31, 2021. 6.5 Any new entrant to the card payment eco-system (card issuer and card network) shall contribute an appropriate amount to the PIDF. 7. Recurring Contribution 7.1 Besides the initial corpus, the PIDF shall also receive annual contribution from card networks and card issuing banks as under: a) Card networks – Turnover based – 1 basis point (bps) i.e., 0.01 paisa per Rupee of transaction; b) 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. 7.2 RBI shall contribute to yearly shortfalls, if any. 8. Collection Mechanism 8.1 By January 31st and July 31st based on card data of December 31st and June 30th respectively. 9. Types of Expenses Covered 9.1 The parameters / rules for claiming the amount of subsidy for the capital expenditure, taking into account the type of device, deployment location etc., shall be framed by the AC. 9.2 Subsidy shall be granted on half yearly basis, after ensuring that performance parameters are achieved, including conditions for ‘active’ status of the acceptance device and ‘minimum usage’ criteria, as defined by the AC. 9.3 The minimum usage 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. 9.4 The subsidy claims shall be processed on half yearly basis and 75 percent of the subsidy amount shall be released. The balance 25 percent shall be released later subject to the status of the acceptance device being active in 3 out of the 4 quarters of the ensuing year. 9.2 Subsidy shall be granted on quarterly basis. 9.3 The subsidy claims shall be processed and initially 75 percent of the subsidy amount shall be released. The balance 25 percent shall be released later after ensuring that performance parameters are achieved, including conditions for ‘active’ status of the acceptance device and ‘minimum usage’ criteria, as defined by the AC, and subject to the status of the acceptance device being active in 3 out of the 4 quarters of the ensuing year. 9.4 The minimum usage 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. 10. Deployment Targets for Acquirers 10.1 Acquirers need to adopt a scientific process for identification of deployment areas, submit proposals to Regional Director, Mumbai Regional Office (MRO), RBI and effectively implement the project. The PIDF proposal format for submission in this regard is enclosed ( Format I ). 11. Claims 11.1 The scheme is on reimbursement basis; accordingly, the claim shall be submitted only after making payment to the vendor. 11.2 Maximum cost of physical acceptance device eligible for subsidy – ₹10,000 (including one-time operating cost up to a maximum of ₹500). 11.3 Maximum cost of digital acceptance device eligible for subsidy – ₹300 (including one-time operating cost up to a maximum of ₹200). 11.4 Subsidised amount of cost of physical and digital payment acceptance devices based on location of deployment shall be as under: Location Physical payment acceptance device (% of total cost) Digital payment acceptance device (% of total cost) Tier-3 and Tier-4 centres 30 50 Tier-5 and Tier-6 centres 40 60 North Eastern States 50 75 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 11.5 Acquirers shall submit their claims through their bankers to RBI, MRO with self-declaration about fulfilment of ‘minimum usage’ and ‘active status’ criteria for deployed devices non-duplication of claims from other schemes, uniqueness of terminalised merchants and inter-operability of deployed devices. 11.6 All initial claims shall be submitted for reimbursement of expenses (less the Input Tax Credit received / receivable by the bank / non-bank under GST) as per format ( Format II ). The claim for balance of eligible subsidy shall be submitted along with self-declaration about fulfilment of ‘minimum usage’ and ‘active status’ criteria for deployed devices as per format ( Format III ). 12. Monitoring of Implementation of Targets 12.1 Implementation of targets under PIDF shall be monitored by RBI, MRO with assistance from Card networks, Indian Banks’ Association (IBA) and Payments Council of India (PCI). 12.2 Acquirers shall submit quarterly deployment reports on achievement of targets to RBI, MRO. 12.3 Acquirers meeting / exceeding their targets well in time and / or ensure greater utilisation of acceptance devices in terms of transactions shall be incentivised while those who do not achieve their targets shall be disincentivised , by scaling up or down the extent of reimbursement of subsidy as follows: Target Achievement / Utilisation % of Subsidy Eligible Less than 75 percent 90 75 percent to 125 percent 100 Greater than 125 percent 110 * Preceded by Shri B P Kanungo † Preceded by Ms Rosie Tshering and Shri D Nageswara Rao ‡ Preceded by Shri Rajeev Kumar 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2020-21/81 · issued 05 Jan 2021. The plain-English explanation above is BankPulse’s own independent summary.

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