The Reserve Bank of India today announced creation of a Payments Infrastructure Development Fund (PIDF) to encourage and enable digital payments in India’s remote areas, where many shops and merchants still don’t have facilities to accept UPI, card, mobile wallet and other e-payments. The move is expected to encourage merchants to deploy Points of Sale (PoS) infrastructure in tier-3 to tier-6 centres and north-eastern states, RBI said in a note. The RBI added that it is important to improve the infrastructure in the underserved areas as only then, the country can make the Digital India mission successful.
Highlighting the need to boost the new payment ecosystem that includes bank accounts, mobile phones, cards, etc, the Reserve Bank committed to making an initial contribution of Rs 250 crores to the PIDF. RBI’s contribution will be half the value of the fund as the remaining contribution will be from card-issuing banks and card networks operating in the country. However, the central bank will also contribute to yearly shortfalls, if required. The PIDF is set to be governed through an advisory council and managed and administered by the Reserve Bank.
The trend of digital payments in the country is on a rise in recent years. Through UPI alone, lakhs of transactions including thousands of crores of rupees take place every day. On June 4, yesterday, 4.63 crore UPI transactions of Rs 9,639 crore took place, according to RBI’s payment systems data. The massive flow of money through the new and digital banking modes show increased convenience and trust of people towards building a Digital India.
Meanwhile, many private institutions are also coming up with eased methods of digital payments. Mastercard, Axis Bank, and Worldline yesterday launched ‘Soft POS’, transforming smartphones into merchant Point of Sale terminals. The solution aimed to address the needs of small businesses by enabling face-to-face payments with Bharat QR and NFC payments, along with remote payments for home deliveries via link-based payments. The app has also allowed banks to have complete visibility of a merchant’s transactions, making it easier for small merchants to get business loans.