PIDF and last mile acceptance – History and what are the opportunities?

21 / 06 / 2024

Accelerating India's digital payments: The RBI's PIDF supports financial inclusion and fintech innovation.

3 min.


On June 05, 2020, the Reserve Bank of India (RBI) announced the creation of the Payments Infrastructure Development Fund (PIDF) to “encourage acquirers to deploy Points of Sale (PoS) infrastructure (both physical and digital modes) in tier-3 to tier-6 centres and northeastern states.”[1] The RBI went on to say “Over the years, payments ecosystem in the country has evolved with a wide range of options such as bank accounts, mobile phones, cards, etc. To provide further fillip to digitisation of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in underserved areas.” The RBI made an initial contribution of INR 250 crores to cover half the fund, while the other half would have to be contributed by schemes operating in the country as well as card issuers.  

 The PIDF was operationalised by the Reserve Bank of India on January 1, 2021 (the notice was dated January 5, 2021); the PIDF was to be operational for 3 years with the option to extend it for another 2 years and the explicit objective was to create 30 lakh new touchpoints every year.[2]

Given this, the 3-year objective was to deploy 90 lakh touchpoints. In a release dated December 29, 2023, the RBI reported that as of November 30, 2023, they had far exceeded the target of deployed acceptance devices. The number of devices deployed amounted to 2.802 crores; 8.27 lakhs were physical devices (POS, mPOS, etc) and 2.71 crores of digital devices (inter-operable QR code-based payments such as UPI QR, Bharat QR) were deployed. The fund corpus stood at INR 1026.37 crores and the amount spent on subsidies in the 3 years stood at INR 541.73 crores.[3].

The RBI announced a further extension of the PIDF scheme by 2 years to December 31, 2025, and also enhanced the scheme to include: [4]

  • Beneficiaries identified as part of the PM Vishwakarma Scheme shall be included as merchants for deployment under the PIDF Scheme.
  • Soundboxes and Aadhaar-enabled biometric devices would be eligible for subsidy under the Scheme.
  • The amount of subsidy for devices deployed is increased from 75% to 90% of the total cost, irrespective of the type of device.


Some of the opportunities that arise as a result of the PIDF scheme are:

  • Financial Inclusion: The scheme aims to support the deployment of digital payment infrastructure in underserved areas, thereby promoting financial inclusion. This opens up opportunities for businesses, especially fintech companies, to develop innovative solutions catering to the unbanked and underbanked populations.
  • Technology Innovation: The PIDF scheme encourages the adoption of technologies such as QR codes, NFC (Near Field Communication), and biometric authentication systems. This fosters opportunities for technology companies to develop and offer cutting-edge solutions to payment service providers.
  • Partnerships and Collaborations: The PIDF scheme encourages partnerships between various stakeholders, including banks, fintech firms, payment aggregators, and government agencies. Collaborations in this ecosystem can lead to synergies and the development of comprehensive solutions for digital payments.
  • Financial Services Innovation: The availability of funds for promoting digital payments can stimulate innovation in financial services. This includes the development of new payment products, such as digital wallets, peer-to-peer payment platforms, and microfinance solutions, catering to diverse customer needs.







Listen to the full podcast episode to better understand this intriguing discussion around PIDF by Mr. Sunil Rongala, Senior Vice President - Strategy and Innovation - India at Worldline.

Sunil Rongala

Senior Vice President - Strategy and Innovation - India at Worldline.

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