Using money from a Payment Infrastructure Development Fund (PIDF), the RBI has set up nearly 2.5 lakh card point-of-sale terminals and over 55 lakh QR code-acceptance points. The Fund was made operational in January 2021 to subsidize deployment of card-swipe machines and QR codes among small merchants and in remote areas.
It should be noted that banks traditionally have been eager to issue debit cards as they got a fee on every transaction. It also meant that money remained longer in the bank as customers did not have to withdraw their weekly or monthly cash requirement.
However, the number of card-swipe machines was low and this was because revenue did not justify capital expenditure. As such, the RBI came up with the PIDF with contributions from the central bank, card-issuing banks and payment networks. The central bank, in an official statement on Tuesday, said that Rs 613 crore was collected in the fund of which Rs 210 crore came from card-issuing banks, Rs 153 crore from card networks and Rs 250 crore from the RBI.
It said about 40% of the machines were deployed at tier 3 and 4 centers, while another 35% was in tier 5 and 6 centers; 7% was in the northeastern states and 18% with small merchants in larger cities under the PM SVANidhi scheme. Acquiring institutions, banks and non-banks, registered under the PIDF Scheme, commit region-wise deployment targets, submit deployment statistics and claim subsidy for devices which fulfill the prescribed criteria.
Furthermore, the target of the PIDF is increasing payments acceptance infrastructure by adding 30 lakh touch points every year – 10 lakh physical and 20 lakh digital payment acceptance devices. Multiple payment acceptance devices, infrastructure supporting underlying card payments, such as physical PoS, mPoS, GPRS, PSTN and QR code-based payments, will be the type of acceptance devices to be covered under the scheme.