New Delhi, Jan 6 (PTI) The Payments Infrastructure Development Fund scheme will boost the digital payments ecosystem in India's tier-III cities and beyond, and further promote financial inclusion, according to industry executives.
The Reserve Bank of India (RBI) had, on Tuesday, issued the implementation guidelines for the scheme on Payments Infrastructure Development Fund (PIDF). It was created in June last year to subsidise deployment of payment acceptance infrastructure in tier-3 to tier-6 centres, with special focus on the northeastern states.
According to industry body Payments Council of India (PCI), the scheme will boost the digital payments' ecosystem in the country.
PCI said this initiative aims at taking digitisation of payments into the hinterlands of the country, and expanding digital payments in these geographies.
'PIDF scheme will boost the acceptance of digital payment in the yet to be completely tapped regions by the industry. This support from the RBI will motivate the industry to set targets for itself and unveil the potential of the targeted geographies in a great way,' PCI Chairman and Infibeam Avenues Ltd Director Vishwas Patel said.
He added that this move will certainly help the RBI and industry to work closely in achieving its vision of financial inclusion and digital transformation.
PIDF will be operational for a period of three years from January 1, 2021, and maybe extended for two more years, depending upon the progress. The PIDF presently has a corpus of Rs 345 crore -- Rs 250 crore contributed by the Reserve Bank of India and Rs 95 crore by the major authorised card networks in the country.
Dilip Asbe, Managing Director and CEO of National Payments Corporation of India (NPCI), expressed confidence that the move will provide a fillip to the last mile penetration of digital payments and acceptance infrastructure.
'Special focus on NE is well deserved, and will accelerate digitisation. This well timed RBI's initiative of PIDF creation, along with the recently announced increased limit of contactless payments from Rs 2,000 to Rs 5,000, will promote significant adoption of digital transactions,' he added.
Mwsipe Technologies founder and CEO Manish Patel termed the announcement as a 'landmark move' as this will help build the right framework for ushering in the next big wave of digital payment acceptance in the country.
'Small merchants, especially in tier-III locations and beyond will be the biggest beneficiaries as cost of deployment of PoS devices and servicing constraints have been the biggest barriers in adoption. PIDF will ensure banks and fintech companies get the required support to prioritise these locations,' Nitish Asthana, President and COO of Pine Labs, explained.
He noted that prevailing macro factors were already pushing the consumer and merchant demand for payments and in-store digitisation solutions.
'Now, the focus needs to be to deliver world-class, India-first products to these small merchants in a cost-effective manner and therefore, all entities need to collaborate now more than ever before,' he said.
T R Ramachandran, Group Country Manager (India and South Asia) at Visa, said the fund - created in June last year - will play a pivotal role in accelerating digital payments acceptance and added that the company will continue to work with the RBI and the ecosystem to augment payment acceptance infrastructure in tier-III cities and beyond, as well as the Northeast.
Spice Money founder Dilip Modi said the scheme will provide a big boost to financial advancement in India's semi urban and rural economy, especially at a time when this segment needs immediate support to jump back into the economy.
'Accessibility and availability of financial services are major challenges that hamper financial inclusion of rural and underserved segments. We currently have half a million Adhikaris on our merchant network, with nearly 90 per cent of them already operating in tier-3 to tier-6 cities. We look forward to supporting this initiative and playing our part in RBI's endeavour to channelise digital payments pan-India,' he added. PTI SR RUJ RUJ