PIDF's likely completion to cause minor topline dent for fintechs

Shares of Paytm fell 9.53 per cent to ₹1,140.75 on BSE on Friday

The likely culmination of the Payments Infrastructure Development Fund (PIDF) is expected to create a modest revenue gap for major fintech players such as Paytm and PhonePe.

 

Shares of Paytm fell 9.53 per cent to ₹1,140.75 on the Bombay Stock Exchange (BSE) on Friday.

 

“In the scenario that the current scheme is not extended or replaced, we expect to significantly offset the impact over time through a combination of higher revenues and more targeted sales efforts,” Paytm said in a statement.

 

One97 Communications, which operates the Paytm brand, said it received ₹128 crore from the scheme in the first half of 2025-26 (H1FY26). Paytm’s total payments revenue during the period stood at ₹2,190 crore.

 

Bengaluru-based fintech PhonePe, in its updated draft red herring prospectus (DRHP), said it received ₹167.4 crore from the PIDF scheme in H1FY26.

 

For PhonePe, the PIDF incentive accounted for 5.2 per cent of its total payments revenue. The company reported payments revenue of ₹3,238.3 crore in the period.

 

The PIDF scheme was introduced to promote the deployment of digital payments acceptance infrastructure in Tier-III to Tier-VI locations, the north-eastern states, and the Union Territories of Jammu & Kashmir and Ladakh.

 

The Reserve Bank of India (RBI) extended the scheme by two years in 2023, making it valid until December 2025. As of November 2023, the total corpus of the scheme stood at ₹1,026.37 crore. The scheme was originally launched in 2021.

 

So far, the central bank has not notified any extension or replacement of the scheme.

 

Payments acceptance infrastructure under PIDF includes physical point-of-sale terminals and quick response codes. The scheme also covers beneficiaries of the PM Street Vendor’s AtmaNirbhar Nidhi in Tier-I and Tier-II centres.