What is e-RUPI?

An electronic voucher-based digital payment system. Prime Minister Narendra Modi will, on 02 August 2021, virtually launch e-RUPI.

"The Prime Minister has always championed digital initiatives. Over the years, several programs have been launched to ensure that the benefits reach its intended beneficiaries in a targeted and leak-proof manner, with limited touchpoints between the government and the beneficiary".

The concept of electronic vouchers takes forward this vision of Good Governance.

DEVELOPED BY:

The National Payments Corporation of India, along with the department of financial services, the Union ministry of health and family welfare, and the National Health Authority, e-RUPI is a cashless and contactless instrument for digital payment.

Beneficiaries and Service by e-RUPI:

1. Without any physical interface, the payment to the service provider is made only after the transaction is completed.
2. Being pre-paid in nature.
3. It assures timely payment to the service provider without the involvement of any intermediary.
4. It is expected to be a revolutionary initiative to ensure a leak-proof delivery of welfare services.

What is e-RUPI, and how does it work?

e-RUPI is a cashless and contactless digital payments medium, which will be delivered to mobile phones of beneficiaries in the form of an SMS string or a QR code.

This will essentially be like a prepaid gift voucher redeemable at specific accepting centers without any credit or debit card, a mobile app, or internet banking.

How will e-RUPI work?

e-RUPI is a cashless and contactless digital payments medium, which will be delivered to mobile phones of beneficiaries in the form of an SMS string or a QR code.

This will essentially be like a prepaid gift voucher redeemable at specific accepting centers without any credit or debit card, a mobile app, or internet banking. e-RUPI will connect the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface.

What are the use cases of e-RUPI?

According to the government, e-RUPI is expected to ensure a leak-proof delivery of welfare services.

It can also be used for delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes, TB eradication programs, drugs & diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies, etc.

The government also said that even the private sector could leverage these digital vouchers as part of their employee welfare and corporate social responsibility programs.

How will these vouchers be issued?

The system has been built by NPCI on its UPI platform and has onboarded banks that will be the issuing entities. Any corporate or government agency will have to approach the partner banks, both private and public-sector lenders, with the details of specific persons and the purpose for which payments have to be made. The beneficiaries will be identified using their mobile number, and a voucher allocated by a bank to the service provider in the name of a given person would only be delivered to that person

.

What is the significance of e-RUPI, and how is it different than a digital currency?

The government is already working on developing a central bank digital currency. The launch of e-RUPI could potentially highlight the gaps in digital payments infrastructure that will be necessary for the success of the future digital currency. In effect, e-RUPI is still backed by the existing Indian rupee as the underlying asset, and the specificity of its purpose makes it different from a virtual currency and puts it closer to a voucher-based payment system.