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RBI Issues Guideline On Payments Infrastructure Development Fund

The Reserve Bank of India (RBI) has introduced guidelines for the Payments Infrastructure Development Fund (PIDF) scheme, which will subsidise the deployment of payments touch points across Tier-3 to Tier-6 centres and the North-Eastern states. While the fund will have a corpus of ₹345 crore from the get-go, the RBI has introduced a fee that card networks and card-issuing banks will have to pay based on their annual turnover. Payments infrastructure incurs a cost for all players in the chain, from banks, non-bank players like fintechs and wallet players to Point-of-Sale (PoS) device manufacturers. A PIDF essentially subsides the cost of acquisition for banks to deploy payments infrastructure like physical PoS devices, mobile PoS, GPRS (General Packet Radio Service), PSTN (Public Switched Telephone Network), QR code-based payments and other card based payments methods. The PIDF will operational for three years from January 1, 2021, which can be extended by two years if necessary. The aim of the fund is to add 1 million physical payment acceptance devices and 2 million digital payments devices every year, the RBI says. While the RBI has set out broad guidelines, it has formed an Advisory Council (AC) responsible for managing the fund and framing the operational rules. It is headed by BP Kanungo, Deputy Governor of the RBI and includes: Sunil Mehta, Chief Executive of the Indian Banks’ Association Dilip Asbe, Chief Executive Officer, National Payments Corporation of India Vishwas Patel, Chairman of Payments Council of India Shailesh Paul, Vice President and Head Merchant…

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