TL;DR Between 2021 and 2025, the Reserve Bank of India disbursed ₹1,417 crore in incentives under the Payments Infrastructure Development Fund (PIDF) to expand digital payment infrastructure in smaller towns and underserved regions. Disbursements grew nearly 3.5 times from ₹154 crore in 2021 to ₹534 crore in 2024. Fintech firms captured about 81% of total incentives, while banks received 19%. PhonePe and Paytm together accounted for over 60% of payouts. The fund closed with a ₹329 crore surplus after the scheme ended on 31 December 2025.

Context
Imagine you run a small tea stall in a Tier-4 town in Nagaland. Your customers mostly pay in cash because the nearest bank branch is 15 kilometres away and card machines are a distant dream. Now someone walks in and offers to set up a QR code or a soundbox for you, with the government covering a big part of the cost. That is essentially what the PIDF scheme tried to do, at scale, across thousands of small towns and remote areas of India.

Digital payments in India took off in a big way after demonetisation in 2016 and grew rapidly with UPI. But most of that growth happened in cities. Tier-3 towns, Tier-4 districts, the northeastern states and Union Territories like Jammu & Kashmir and Ladakh were left largely behind, not because people did not want to go digital, but because many merchants simply lacked the infrastructure to accept digital payments.

To fix this, the Reserve Bank of India launched the Payments Infrastructure Development Fund (PIDF) scheme in January 2021. The scheme provided financial incentives to banks and payment companies for deploying Point of Sale (POS) terminals, QR codes and soundboxes in these underserved areas. The scheme ran until 31 December 2025.

Who Compiles This Data?
The data comes from a Right to Information (RTI) request filed with the Reserve Bank of India. It provides year-wise and entity-wise details of incentives disbursed and contributions made to the PIDF between 2020 and 2025.

Where can I download Clean & Structured Data on PIDF?
Clean, standardised, and ready-to-use datasets on PIDF incentives released and contributions made, broken down by year and entity, can be downloaded from Dataful.

Key Insights

Incentive disbursements grew nearly 3.5 times in four years
In 2021, the first year of the scheme, ₹154 crore was released in incentives. By 2024, that number had jumped to ₹534 crore, a growth of nearly 3.5 times. Year on year, disbursements grew by about 37% in 2022, a sharp 77% in 2023, and another 43% in 2024 as more entities ramped up deployments and expanded coverage.

The lower figure in 2025 reflects the scheme ending on 31 December rather than a slowdown in deployments. Across the full life of the scheme, a total of ₹1,417 crore was disbursed as incentives to various entities deploying payment infrastructure across India.

Fintechs received 4 out of every 5 rupees in incentives

Here is a striking split: of the ₹1,417 crore paid out between 2021 and 2025, fintechs received approximately ₹1,149 crore, which works out to about 81% of total incentives. Banks, despite being older and more established players, received only around ₹268 crore, or about 19%.

• This reflects a structural difference: fintech firms such as PhonePe, Paytm and BharatPe specialise in rapid merchant onboarding, often deploying QR codes and soundboxes through field agents even in smaller towns.

• Banks, especially public sector ones, tend to be slower in deploying physical infrastructure in hard-to-reach geographies. They often rely on third-party aggregators for merchant acquisition.

The data clearly shows that the PIDF scheme, while open to all, was disproportionately used by fintech companies that had already built playbooks for last-mile merchant expansion.

The fintech rivalry: PhonePe pulls ahead, Paytm fights back
If there is one story that runs through the entire PIDF scheme, it is the battle between PhonePe and Paytm, or more precisely, One 97 Communications Limited, which is the parent entity of Paytm. Together, they account for over 60% of all incentives ever released under the scheme.

• In 2021, PhonePe started strong with ₹80 crore, while Paytm was at ₹20 crore. PhonePe had a clear head start in soundbox and QR deployments.

• By 2022, Paytm had caught up somewhat, reaching ₹49 crore against PhonePe’s ₹72 crore.

• 2023 saw a dramatic reversal. Paytm surged to ₹123 crore, overtaking PhonePe, which stood at ₹87 crore. This was Paytm’s peak year and coincided with its aggressive push to expand merchant acceptance across smaller cities.

• In 2024, PhonePe received ₹225 crore in incentives, more than double Paytm’s ₹111 crore. This was also PhonePe’s biggest single-year incentive.

• In 2025, both companies received similar amounts, with Paytm at ₹48 crore and PhonePe at ₹43 crore, reflecting the wind-down of the scheme.

Over the full scheme period, PhonePe leads with ₹507 crore in total incentives, compared to Paytm’s ₹352 crore.

The fund was built responsibly and ended with a surplus
The PIDF was not funded by the government’s budget. It was a pooled corpus built from contributions by three types of entities: the RBI itself, card-issuing banks like HDFC and SBI, and card networks like Visa and Mastercard.

• The RBI seeded the fund with a one-time contribution of ₹250 crore when the scheme was launched in 2020. It did not contribute to the subsequent years.

• Card-issuing banks contributed consistently, growing from ₹115 crore in 2020 to ₹335 crore by 2023, a nearly 3 times increase over three years.

• Card networks also contributed steadily, from ₹100 crore in 2020 to ₹187 crore in 2023.

No contributions are recorded for 2024 and 2025. This is because the fund had accumulated a sufficiently large corpus by 2023 that no fresh top-ups were needed for the final two years of the scheme.

When the scheme closed on 31 December 2025, the total contributions ever made stood at approximately ₹1,746 crore. Against this, ₹1,417 crore had been paid out as incentives, leaving a healthy unspent surplus of around ₹329 crore. The fund appears to have been designed conservatively, ensuring it would not run dry before the scheme’s end. What happens to this leftover corpus, whether it gets rolled into a successor scheme or returned to contributors, remains to be seen.

Why Does It Matter?

The PIDF scheme was a quiet but important policy experiment: using targeted financial incentives to push digital infrastructure into markets where it was otherwise unprofitable.

Three patterns stand out from the data:

• Participation scaled rapidly, with disbursements growing nearly 3.5 times in four years.

• Fintech firms proved far more responsive than banks to infrastructure incentives.

• The fund was managed conservatively and closed with a surplus rather than a deficit.

Whether merchants in smaller towns continue to actively accept digital payments, even without subsidies, will determine whether the PIDF scheme ultimately succeeds in permanently expanding India’s digital payments ecosystem.

Key Numbers

• Total incentives released under PIDF (2021 to 2025): ₹1,417 crore

• Total contributions pooled into PIDF (2020 to 2023): ₹1,746 crore

• Unspent corpus at scheme close (December 31, 2025): ₹329 crore

Year-wise incentive disbursements:

• 2021: ₹154 crore

• 2022: ₹211 crore (up 37% from 2021)

• 2023: ₹373 crore (up 77% from 2022)

• 2024: ₹534 crore (up 43% from 2023)

• 2025: ₹145 crore (scheme ended December 31, 2025)

Fintech vs Banks split (total, 2021 to 2025):

• Fintechs: ₹1,149 crore (81%)

• Banks: ₹268 crore (19%)

Top recipients overall (2021 to 2025):

• PhonePe: ₹507 crore

• Paytm (One 97 Communications): ₹352 crore

• State Bank of India: ₹83 crore

• Pine Labs: ₹82 crore

• Resilient Innovations (BharatPe): ₹74 crore

• HDFC Bank: ₹60 crore

Contributions to PIDF by entity type:

• RBI: ₹250 crore (one-time, 2020 only)

• Card Issuing Banks: ₹961 crore (2020 to 2023)

• Card Networks: ₹483 crore (2020 to 2023)