admin August 28, 2021
Updated 2021/11/04 at 1:15 PM

e-RUPI is a digital prepaid, purpose- and person-specific payment service that was just announced by Prime Minister Modi.


How E-RUPI works?

e-RUPI is a digital voucher that a beneficiary receives in the form of an SMS or QR code on his phone. It’s a pre-paid voucher that he or she can use at any location that accepts it. For example, if the government wants to cover a specific treatment for an employee at a specific hospital, it can use a partner bank to issue an e-RUPI voucher for the required amount. On his feature phone or smartphone, the employee will receive an SMS or a QR Code. He or she can go to the designated hospital, use the services, and pay using the e-RUPI voucher that was sent to his phone. Without any physical interface, e-RUPI will connect the service sponsors (government) with the beneficiaries (BPL Card holders) and service providers (hospitals) in a digital manner. As a result, e-RUPI is a one-time contactless, cashless voucher-based mode of payment that enables users to redeem vouchers without the usage of a card, digital payments app, or internet banking. The system was created using the National Payments Corporation of India’s UPI platform, and banks that will be the issuing organizations have been onboarded.

The Importance of e-RUPI

e-RUPI does not require the beneficiary to have a bank account, which is a significant advantage over other digital payment methods. It offers a simple, contactless two-step redemption process that does not necessitate the disclosure of personal information. Another advantage is that e-RUPI can be used on basic phones as well as smartphones, allowing it to be utilized by people who do not own smartphones or in locations where there is no access to the internet.  e-RUPI is projected to play a key role in enhancing and increasing transparency in Direct-Benefit Transfer. There would be some cost savings since there will be no need for the actual issue of vouchers. e-RUPI would ensure real-time payments to the service provider because it is a prepaid voucher. The issuer may easily scale e-RUPI because it is built on the UPI platform. The user base of e-RUPI is projected to grow in the coming days, with even the private sector adopting it to distribute non-cash bonuses to employees and support targeted CSR programs. It can be used for business-to-business (B2B) transactions by MSMEs. Individuals could later use it as a gift. It has the potential to bring the ease and simplicity of UPI to government aid programs. It will assist the government in fine-tuning targeted welfare programs as a one-to-many payments facilitator.

Use of e-RUPI’s Application

Identified students receive vouchers to pay school fees and costs at accredited public and private institutions of their choice, which compete for full fee-paying students. Students and schools benefit from the option and competition that results, while openness and accountability are improved. The program’s inefficiency stems from high administrative expenses, leakages, exclusion, and inefficiencies. Beneficiaries will be able to purchase rations from any outlet they want using a food-specific e-RUPI ticket. e-RUPI has the potential to improve the PDS program’s efficiency. One Nation, One Ration Card has the ability to allow retailers within and outside the PDS network to redeem vouchers at market pricing. Its immediate and first-use case might be to provide cashless service at Covid vaccination centers that charge a fee (CVCs). Corporations and philanthropies, for example, can purchase services in bulk to vaccinate workers and people in need. On their feature/smartphone, the intended recipients will get an SMS or QR code that can be used for cashless vaccination at participating centers. Identified recipients will get e-RUPI vouchers with a set value that may be used at any impaneled healthcare institution, giving them flexibility and choice. The instant payment will help the service provider.

Way Ahead

The use of e-RUPI in numerous government programs would improve business efficiency, simplicity, transparency, and accountability. As seen by the widespread use of Aadhar for numerous governance projects, making e-RUPI distribution and acceptance incentive-compatible is suggested. Light regulation and the competitiveness of e-RUPI will encourage innovation and uptake. Later on, all banks, large and small, NBFCs, non-bank PPI issuers, and telecoms may be permitted to issue it.

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