💳 PIDF
Payment Infrastructure Development Fund for subsidizing deployment of payment acceptance infrastructure
What is PIDF?
The Payment Infrastructure Development Fund (PIDF) is a dedicated fund established by the Reserve Bank of India (RBI) to subsidize the deployment of payment acceptance infrastructure across India. The scheme aims to bridge the digital payment gap, particularly in underserved and rural areas where merchants often lack access to card machines and digital payment devices.
PIDF is operational for a 5-year period from 1st January 2021 to 30th December 2025, with a total corpus of ₹345 crore.
| Parameter | Details |
|---|---|
| Launch Date | 1st January 2021 |
| Duration | 5 years (till 30.12.2025) |
| Total Corpus | ₹345 crore |
| RBI Contribution | ₹250 crore |
| Card Networks Contribution | ₹95 crore |
| Governance | Ex-officio Advisory Council (AC) |
Target & Objectives
The primary goal of PIDF is to increase payment acceptance infrastructure by adding 30 lakh touch points annually. This ambitious target is split between:
- 10 lakh physical devices – Traditional PoS terminals, mPoS, and similar hardware
- 20 lakh digital devices – QR codes, soundboxes, and other software-based solutions
This emphasis on digital devices reflects their lower cost and faster deployment compared to physical terminals, making them ideal for small merchants and street vendors.
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What is PIDF?
The Payment Infrastructure Development Fund (PIDF) is a dedicated fund established by the Reserve Bank of India (RBI) to subsidize the deployment of payment acceptance infrastructure across India. The scheme aims to bridge the digital payment gap, particularly in underserved and rural areas where merchants often lack access to card machines and digital payment devices.
PIDF is operational for a 5-year period from 1st January 2021 to 30th December 2025, with a total corpus of ₹345 crore.
| Parameter | Details |
|---|---|
| Launch Date | 1st January 2021 |
| Duration | 5 years (till 30.12.2025) |
| Total Corpus | ₹345 crore |
| RBI Contribution | ₹250 crore |
| Card Networks Contribution | ₹95 crore |
| Governance | Ex-officio Advisory Council (AC) |
Target & Objectives
The primary goal of PIDF is to increase payment acceptance infrastructure by adding 30 lakh touch points annually. This ambitious target is split between:
- 10 lakh physical devices – Traditional PoS terminals, mPoS, and similar hardware
- 20 lakh digital devices – QR codes, soundboxes, and other software-based solutions
This emphasis on digital devices reflects their lower cost and faster deployment compared to physical terminals, making them ideal for small merchants and street vendors.
Target Geographies
PIDF prioritizes regions where digital payment infrastructure is weakest. The scheme focuses on bringing financial inclusion to areas that have historically been underserved:
| Priority Level | Target Areas |
|---|---|
| Primary Focus | Tier-3 to Tier-6 centres – Towns and villages with populations below 1 lakh |
| Tier-1 & Tier-2 | Only for beneficiaries of PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) and PM Vishwakarma schemes |
| Special Focus | North Eastern States, Jammu & Kashmir, and Ladakh – Strategically important regions requiring additional support |
Distribution of Funds
The fund allocation reflects the priority given to smaller towns and special regions:
| Region | Fund Allocation |
|---|---|
| Tier-1 to Tier-4 centres | 30% |
| Tier-5 and Tier-6 centres | 60% |
| North Eastern States | 10% |
Note: The higher allocation to Tier-5 and Tier-6 centres (60%) ensures that the most underserved areas receive maximum support.
Eligible Merchants
PIDF targets small businesses and service providers who interact with a large number of customers daily but may lack digital payment facilities. The following categories of merchants are eligible for subsidized infrastructure:
| Category | Examples |
|---|---|
| Transport & Hospitality | Auto/taxi drivers, small hotels, dhabas |
| Government Payment Acceptors | Utility bill collection centres, municipal offices |
| Fuel Pumps | Petrol pumps, especially in rural areas |
| PDS Shops | Public Distribution System (ration) shops |
| Healthcare Providers | Clinics, pharmacies, diagnostic centres |
| Kirana Shops | Neighborhood grocery stores |
| Street Vendors | Hawkers, roadside stalls, food vendors |
Types of Acceptance Devices Covered
PIDF subsidizes a wide range of payment acceptance devices, both physical and digital:
| Device Type | Description |
|---|---|
| Physical PoS | Traditional Point of Sale card-swipe machines used by larger merchants |
| mPoS | Mobile Point of Sale – Compact devices that connect to smartphones for card payments |
| GPRS PoS | Devices using General Packet Radio Service (mobile network) for connectivity |
| PSTN PoS | Devices using Public Switched Telephone Network (landline) for connectivity |
| QR Code | QR code-based payments where customers scan codes using apps like UPI, Paytm, etc. |
| Contemporary Devices | Newer technologies like soundbox devices (audio confirmation of payments) and Aadhaar-enabled biometric devices (added from 1st October 2023) |
IMPORTANT
Payment methods that are NOT inter-operable (i.e., work only with specific apps or closed ecosystems) are not eligible under PIDF. This ensures that subsidized infrastructure benefits all payment networks equally.
Maximum Cost Eligible for Subsidy
The scheme sets upper limits on the cost of devices and operating expenses that qualify for subsidy:
| Device Type | Maximum Device Cost | Maximum Operating Cost |
|---|---|---|
| Physical PoS | ₹10,000 | Up to ₹500 |
| Digital PoS (QR codes) | ₹300 | Up to ₹200 |
| Contemporary Devices (Soundbox, Biometric) | ₹2,000 | Up to ₹300 |
Operating costs include expenses like connectivity charges, paper rolls for receipts, and basic maintenance.
Subsidy Rates
The percentage of subsidy varies based on the location and type of device. Higher subsidies are offered in more remote areas to incentivize deployment:
| Location | Physical PoS Subsidy | Digital PoS & Contemporary Subsidy |
|---|---|---|
| Tier-1 to Tier-4 centres | 60% | 75% |
| Tier-5 and Tier-6 centres | 75% | 90% |
| NE States, J&K, Ladakh | 90% | 90% |
Example: A ₹10,000 Physical PoS deployed in a Tier-6 village would receive a ₹7,500 subsidy (75%), leaving only ₹2,500 to be borne by the deploying entity.
Minimum Usage Requirements
To ensure that subsidized devices are actually being used and not just deployed for claiming subsidies, PIDF mandates minimum usage criteria:
| Requirement | Threshold |
|---|---|
| Minimum Transactions | At least 50 transactions over a 90-day period |
| Minimum Active Days | Device must be active for at least 10 days within the 90-day period |
Devices that fail to meet these minimum usage requirements will not qualify for subsidy in subsequent quarters.
Subsidy Claim Process
The subsidy is not paid in full upfront. Instead, it follows a staged release process to ensure continued usage:
| Stage | Details |
|---|---|
| Claim Frequency | Quarterly – Claims are submitted every 3 months |
| Initial Release | 75% of the eligible subsidy amount is released upon successful deployment |
| Balance Release | Remaining 25% is released only if the device remains active in 3 out of 4 quarters |
This phased approach ensures that deploying entities maintain their infrastructure and merchants actually use the devices.
Fund Contributions
Initial Corpus (₹345 Crore)
The PIDF was seeded with contributions from RBI and the payments industry:
| Contributor | Amount |
|---|---|
| RBI | ₹250 crore |
| Card Networks (Visa, Mastercard, RuPay, etc.) | ₹100 crore (total) |
| Debit Card Issuers | ₹1 per card issued |
| Credit Card Issuers | ₹3 per card issued |
Recurring Contributions
The fund is replenished through ongoing contributions from the payments ecosystem:
| Contributor | Contribution Rate |
|---|---|
| Card Networks | 1 bps (0.01 paisa per ₹) on transaction turnover |
| Card Issuing Banks (Debit) | 1 bps on turnover + ₹1 per new card issued |
| Card Issuing Banks (Credit) | 2 bps on turnover + ₹3 per new card issued |
| RBI | Contributes to cover any yearly shortfalls in the fund |
bps stands for basis points. 1 bps = 0.01% = ₹0.01 per ₹100 of transaction value. So banks or card networks (visa, mastercard, RuPay etc.) pay ₹0.01 per ₹100 of transaction value plus a flat free per new card issued to this fund.
Key Takeaways
| Parameter | Details |
|---|---|
| Scheme Duration | 01.01.2021 - 30.12.2025 (5 years) |
| Total Corpus | ₹345 crore |
| Annual Target | 30 lakh touch points (10L physical + 20L digital) |
| Physical PoS Subsidy | 60-90% depending on location |
| Digital PoS Subsidy | 75-90% depending on location |
| Claim Frequency | Quarterly |
| Minimum Transactions | 50 in 90 days |
| Primary Focus Areas | Tier-3 to Tier-6, NE States, J&K, Ladakh |
Summary Cheat Sheet
| Concept / Topic | Key Details / Explanation |
|---|---|
| Full Name | Payment Infrastructure Development Fund |
| Established By | RBI |
| Duration | 5 years (1st Jan 2021 to 30th Dec 2025) |
| Total Corpus | Rs. 345 crore (RBI: Rs. 250 crore + Card Networks: Rs. 95 crore) |
| Annual Target | 30 lakh touch points (10 lakh physical + 20 lakh digital) |
| Governance | Ex-officio Advisory Council (AC) |
| Primary Focus | Tier-3 to Tier-6 centres (towns/villages below 1 lakh population) |
| Tier-1 & Tier-2 | Only for PM SVANidhi and PM Vishwakarma beneficiaries |
| Special Focus | NE States, J&K, Ladakh |
| Fund Allocation | Tier-1 to 4: 30%; Tier-5 & 6: 60%; NE States: 10% |
| Physical PoS Subsidy | Tier-1 to 4: 60%; Tier-5 & 6: 75%; NE/J&K/Ladakh: 90% |
| Digital/Contemporary Subsidy | Tier-1 to 4: 75%; Tier-5 & 6: 90%; NE/J&K/Ladakh: 90% |
| Max Device Cost (Physical PoS) | Rs. 10,000 (operating cost up to Rs. 500) |
| Max Device Cost (Digital PoS) | Rs. 300 (operating cost up to Rs. 200) |
| Max Device Cost (Contemporary) | Rs. 2,000 (operating cost up to Rs. 300) |
| Minimum Usage | 50 transactions in 90 days; active for 10 days in 90-day period |
| Subsidy Claim Frequency | Quarterly |
| Initial Subsidy Release | 75% upon deployment |
| Balance Subsidy Release | 25% if active in 3 out of 4 quarters |
| Eligible Merchants | Auto/taxi drivers, small hotels, fuel pumps, PDS shops, healthcare, kirana shops, street vendors |
| Devices Covered | Physical PoS, mPoS, GPRS/PSTN PoS, QR codes, soundboxes, Aadhaar biometric devices |
| Interoperability Rule | Non-interoperable devices are NOT eligible |
| Card Network Contribution | 1 bps on transaction turnover |
| Debit Card Issuer Contribution | 1 bps on turnover + Rs. 1 per new card |
| Credit Card Issuer Contribution | 2 bps on turnover + Rs. 3 per new card |
| RBI Role | Covers any yearly shortfalls in the fund |
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