The Reserve Bank of India (RBI) said on Friday it is creating a Payments Infrastructure Development Fund to push digital payments across the country. The central bank will make an initial contribution of Rs 250 crore covering half the fund. The remaining will come from the card-issuing banks and card networks operating in the country.
This fund has been created to encourage acquirers to deploy point of sale (PoS) infrastructure, both physical and digital, in tier three to six centres and northeastern states.
Over the years, payments ecosystem in the country has evolved with a wide range of options like bank accounts, mobile phones and cards.
"To provide further fillip to the digitisation of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in underserved areas," the RBI said in a statement.
The dedicated fund for deepening digital payments infrastructure will receive recurring contributions to cover operational expenses from card-issuing banks and card networks.
The central bank will also contribute to yearly shortfalls if necessary.
The fund will be governed through an advisory council but it will be managed and administered by the RBI.
Deepak Chandnani, managing director of Worldline South Asia and the Middle East, said: "The move will make the economics more favourable and significantly increase the merchant base accepting digital payments in line with the vision of blanketing the country with a digital payments acceptance infrastructure."