‘Cashless instrument of payment’: PM launches e-RUPI; know how it works

e-RUPI could potentially highlight the gaps in digital payments infrastructure that will be necessary for the success of the future digital currency.

New Delhi: Prime Minister Narendra Modi on Monday launched the country’s first-of-a-kind digital payment platform called e-RUPI, which claims to be a person and purpose-specific digital payment solution.

Developed by the National Payments Corporation of India (NCPI) in collaboration with the Department of Financial Services, Ministry of Health & Family Welfare and National Health Authority, the PMO called it to be a revolutionary initiative in the direction of ensuring a leak-proof delivery of welfare services.

What is e-RUPI?

The e-RUPI is essentially a voucher-based welfare distribution system and is being seen as an alternative to direct benefit transfer (DBT).

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A statement from the Prime Minister’s Office called e-RUPI a cashless and contactless instrument for digital payment. This is touted to be the first step towards having a digital currency in the country.

It could potentially highlight the gaps in digital payments infrastructure that will be necessary for the success of the future digital currency.

It is founded on the Unified Payment Interface (UPI) platform created by NPCI that allows seamless real-time bank transfers and payments in India.

How does e-RUPI work?

Take a Sodexo coupon. Authorized by Sodexo Inc., it is issued by an organization in order to purchase grocery, meals and non-alcoholic beverages from any of the Sodexo affiliated outlets. e-RUPI also works in a similar way.

A QR code or SMS string-based e-voucher will be delivered to the mobile of e-RUPI beneficiaries. The users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app or internet banking access, at the service provider—for example, at a hospital.

With this, the section which does not use banks can be expected to be benefited.

Being pre-paid in nature, it assures timely payment to the service provider without the involvement of any intermediary.

Where can e-RUPI be used?

PMO said that e-RUPI can also be used for delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes, TB eradication programmes, drugs & diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies, etc.

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

Right now, there are 11 banks supporting e-RUPI, including State Bank of India, ICICI Bank, HDFC Bank, Punjab National Bank, Axis Bank and Bank of Baroda. Canara Bank, Indusind Bank, Indian Bank, Kotak Bank and Union Bank of India can issue e-RUPI coupons, but cannot accept them.

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