The Reserve Bank of India (RBI) recently announced the operationalisation of the payment infrastructure development fund (PIDF) scheme, in a bid to subsidise deployment of payment acceptance infrastructure in tier-3 to tier-6 centres, with the primary focus north-eastern states of the country. RBI prescribed details of contribution to the fund and has sought to incentivise the usage of payment devices. Effective from 1 January 2021, the fund will be operational for three years and may be extended for two more years. Merchants engaged in services such as government payments, transport and hospitality, fuel pumps, public distribution system (PDS) shops, healthcare, and grocery shops may be included, especially in the targeted locations. Numerous payment acceptance devices and infrastructure supporting underlying card payments, such as mPoS, public switched telephone network (PSTN), physical Point Of Sale (PoS), GPRS , and QR code-based payments will be funded under the scheme. After ensuring that performance criteria are met, including conditions for the ‘active’ status of the acceptance device and ‘minimum usage’ criteria, as defined by an RBI advisory council, the subsidy shall be granted on a half-yearly basis. The minimum usage shall be called as 50 transactions over a span of 90 days and active status shall be minimum usage for 10 days over the 90-day span. The subsidy claims shall be processed on a half-yearly basis, and 75% of the subsidy amount shall be released. The balance 25% shall be released later, depending on the device's status in three out of the four quarters of the ensuing year. The scheme is on a reimbursement basis. The claim shall be submitted accordingly, only after making payment to the vendor. The maximum cost of physical acceptance devices eligible for the subsidy will be Rs 10,000, including one-time operating costs up to Rs 500. The maximum cost of digital acceptance devices eligible for a subsidy will be Rs 300, including a one-time operating cost up to Rs 200. Target implementation shall be monitored by RBI with assistance from card networks, Payments Council of India (PCI) and the Indian Banks’ Association (IBA). Quarterly reports shall be submitted by acquirers on achieving the targets, to the RBI. Acquirers who meet or exceed their targets well in time and/or ensure greater utilisation of acceptance devices in terms of transactions shall be incentivised. Those who fail to achieve their targets shall be disincentivised, by scaling up or down the extent of reimbursement of subsidy. Image Source