Payment Infrastructure Development Fund (PID Fund)
To boost the number of merchants accepting digital payments in the country, the Reserve Bank of India has announced a Payment Infrastructure Development Fund (PDF) scheme.
Benefits of Infrastructure Development Fund (PIDF)
Its objective is to develop payment acceptance infrastructure in Tier-3 and Tier-4, with a special focus on the North-Eastern region of the country. Under this, the creation of infrastructure related to digital and manual ‘point of sale’ will be encouraged.
Implementation of PID Fund:
- At present, the total fund of PIDF is 345 crores. Initially, the Reserve Bank of India will contribute 250 crores to this fund; the remaining amount will be provided by the card issuing banks and authorized card networks.
- The fund will be operated from January 1, 2021 for three years. It can be extended for two more years if required.
- Also, the PIDF will receive annual contributions from the card network and card issuing banks.
- An Advisory Council has been formed for the management of PIDF, chaired by Deputy Governor of RBI B.P. Kanungo. This council will run the funds.
- This would target merchants who have not yet been terminated, i.e. those who do not have any equipment available for payment acceptance.
- This will mainly include those merchants who engage in public distribution system shops, healthcare and grocery stores, government payments, and services such as transportation and hospitality.
- Under this, various payment instruments and card payments such as POS, Mobile POS, General Packet Radio Service, Public Switched Telephone Network, and QRCode-based equipment will be funded.
- It also has a subsidy provision under which subsidy will be provided for 30% to 50% of the cost of physically installed POS machines and 50% to 75% for digital POS machines. This subsidy will be provided on a half-yearly basis.
- The RBI will monitor the implementation of the targets set in collaboration with the Indian Network Banks Association (IBA) and the Payments Council of India (PCI). Also, the acquirers will submit reports to RBI on quarterly basis in terms of achievement of targets.
Source – The Hindu