What is e-RUPI?

The expansion of India's digital payments ecosystem has been nothing short of spectacular. According to research from ACI Worldwide, India maintained its lead with 25.5 billion real-time payment transactions. Customers' inclinations have moved towards digital payments due to innovative technology,evolving financial products and innovative business models in the market. As indicated by the Annual Report 2020-2021 of the Reserve Bank of India, the COVID-19 outbreak has pushed the country towards less-cash options, a situation that was already profiting from open innovation.

Mr Narendra Modi, India's Prime Minister, has undertaken many digital projects. There has been a digital revolution in India in the previous few years. Citizens have grown more aware of digital payment methods, which has enhanced their living standards. This system authorises people to pay and receive digital payments. On 2nd August 2021, the Prime Minister officially launched the e-RUPI, a paperless and contactless digital payment system. According to the Prime Minister, the e-RUPI voucher would help make Direct Benefit Transfer more efficient in digital transactions over the country. It will provide the digital government with a new dimension. He described e-RUPI as a sign of India's success in integrating technology into people's lives.

Did you know?

Sweden will be the first cashless country on in 2023, with a purely digital economy.

What exactly is e-RUPI?

e-RUPI is a a text-based or QR code-based e-voucher sent to the receivers' cellphones. One who uses this comprehensive one-time payment platform will be able to recover vouchers from service providers without using any digital mobile payments apps, any payment card, or net banking.

Indian National Payments Corporation developed it in collaboration with the Ministry of Finance and Health and the National Health Authority. According to the NPCI, e-RUPI prepaid vouchers can be provided in two ways: the first way is person-to-person (P2P), and the second is business-to-consumer (B2C). Yet, so far, it has only supplied data to the extent of the B2C sector.

What is voucher?

• e-RUPI is a digital voucher that users will receive as a Quick Response code or Text message voucher, allowing payments which can be made directly to their bank account. Any public body or firm can produce e-RUPI vouchers through partner banks.
• The receiver must present the Quick Response code or message to the retailer, who will scan it and provide a security code to the beneficiary's mobile number. For the process to be finalised, the latter should submit the code to the vendor.
• These vouchers are issued for a specific reason; thus if the authority distributes them for vaccinations, they should only be used for the same.

Also Read: UPI Transaction Limit 2021: Of 105 Banks Along With SBI and HDFC

About National Payment Corporation of India (NPCI)

 The National Payment Corporation of India (NPCI) is running India's retail payment and settlement systems. The Reserve Bank of India and the Indian Banks' Association founded this institution. To build a strong payment and settlement infrastructure in India, this institution works under the Payment and Settlement Systems Act of 2017. 

The National Paym ent Corporation of India (NPCI) is a non-profit corporation under Section 8 of the Companies Act of 2013. The National Payments Corporation of India (NPCI) is also in charge of managing the banking infrastructure in India, including physical and electronic payment and settlement systems.

This group focuses on using technology to bring innovation to the payment system. State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank, and HSBC are the promoter banks of NPCI.

Procedure to issue e-RUPI vouchers

On the UPI platform, the National Payment Corporation of India created an e-RUPI digital payment system. India's national payment organisation has boarded banks that would be the issuing authority of the voucher. The company or government agency must contact a partner bank (including private and public sector lenders) with information about the specific person and why the payment is needed. Beneficiaries will be identified using the bank-issued mobile phone voucher. This platform will be a ground-breaking digital effort to improve the standard of living and simplify the payment process.

The objective of e-RUPI Digital Payment solution

• An e-RUPI digital payment platform's major goal is to establish a cashless and seamless payment system that allows citizens to pay digitally with ease. 
• Users may make safe payments with the assistance of this payment platform. 
• This payment mechanism employs an SMS string-based or QR code e-voucher transmitted to the beneficiary's mobile phone. 
• An e-RUPI digital payment system guarantees that services are paid on time without the need for a middleman. 
• Users will not need to hold any cards or digital payment apps, nor will they need online banking access to make payments, making the procedure easy and safe.

List of Banks That Are With eRUPI app

Features of e-RUPI Digital Payment

• On August 2, 2021, India's Prime Minister, Mr Narendra Modi, introduced an e-RUPI digital payment platform.
• This platform will function in a contactless and cashless manner.
• Users can utilise this system to make digital payments using SMS string-based or QR codes e-vouchers.
• This voucher will be sent to the users' cell phones.
• This voucher may be used without the need for a payment app, online banking, or a credit card.
• India's national payment company has established an e Rupi digital payment service on its UPI platform.
• The Department of Financial Services, the National Health Authority and the Ministry of Health and Family Welfare are collaborators.
• The services provider will be linked to the recipients and service providers through this programme. This contact will be made entirely digitally, with no physical interface.
• Payment to the service provider will be paid when the transaction is completed via this platform.
• e-RUPI is a prepaid payment platform that does not require any service supplier to make payments.
• This platform may also be utilised to provide services under government-sponsored medication and nutritional assistance programmes.

Benefits of e-RUPI

Advantages to End-user

• The beneficiary does not require to carry a printout of the e-voucher.
• Easy redemption - There are only two steps to the redemption procedure.
• Beneficiaries do not have to reveal personal information, ensuring that their privacy is protected.
• Users redeeming the voucher do not need a digital payment app or a bank account; they need a mobile phone and an e-voucher.

 Advantages to Merchants

• Simple and safe - The beneficiary shares a verification code that authorises the voucher.
• Payment collection is hassle-free and contactless - It is not necessary to handle cash or credit cards.
• Consumers reclaiming the voucher do not need an application for digital payment or a bank account; they need a mobile phone and an e-voucher.

 Advantages to Corporates

• Corporates may help their workers' well-being by issuing UPI Prepaid Vouchers.
• It is a fully digital transaction that does not require physical issuance (card/voucher), resulting in cost savings.
• Voucher redemption visibility - The issuer can track voucher redemption.
• Voucher distribution that is quick, secure, and contactless.

Uses Of e-RUPI Digital Payment Platform

The service supplier fees will be paid only after the conclusion of a transaction using e-RUPI. This payment platform will be prepaid. Thus, a middleman will not need to make the service provider's payment. 

Aside from that, this platform can be used to deliver services under schemes that provide: drugs and nutritional support, such as a mother and child welfare scheme, a tuberculosis eradication programme, drug and diagnostic under the Ayushmann Bharat Pradhan Mantri Jan Arogya Yojana, fertiliser subsidies, and so on. 

The commercial sector can also use these digital tokens for employee welfare and corporate social responsibility projects. It will provide a leak-proof innovative delivery of social services.

How does e-RUPI vary from a digital currency?

The Ministry of India and the RBI is already working on a central bank digital currency. The introduction of e-RUPI might reveal the holes in the digital payments architecture required for the digital currency's viability. In effect, e-RUPI is still backed by the Indian rupee as the underlying asset. Its purpose distinguishes it from virtual currencies and brings it closer to a voucher-based payment system.

Also Read: All About UPI– United Payments Interface

What does a central bank digital currency (CBDC) imply?

 The Central Bank of India has stated that the Central Bank Digital Currency, or CBDC, will be deployed in segments. CBDCs are electronic equivalents of a country's actual fiat money, like the rupee, that is published by the RBI. Another rationale as to why CBDCs are becoming essential from the perspective of the banking system is the rise of private virtual currencies like Cryptocurrency. T Rabi Sankar, Cental bank deputy governor stated in a webinar on July 23, 2021, that CBDC is desired not merely for the perks they bring in payments structure, but also could be vital to safeguard the citizens in a situation of volatile private VCs(such as Cryptocurrency and Bitcoins). 

While the governor of the Central bank, Shaktikanta Das has earlier raised concerns about cryptocurrencies, there seems to be a current shift in Mint Street thinking in support of CBDCs. Whereas CBDCs are conceptually equivalent to paper currency, their implementation would involve changes to the underlying legal system, as current legislation is primarily focused on banknotes.

Conclusion

Finally, we must place a major emphasis on digital literacy to encourage the safe and widespread usage of new tools like e-RUPI. Even the advent of UPI payments was accompanied by a spate of frauds that used QR codes and other techniques to prey on unsuspecting customers. Some of these hazards may be addressed by e-RUPI, but some people who are not well-versed in technology may face challenges. The digital literacy campaign should focus on instilling a culture of privacy, protecting personal information, and training beneficiaries to use digital instruments safely and securely. It is also an area where all ecosystem stakeholders will need to work together more closely. 

Targeted programmes to reach out to marginalised and poor populations would help e-RUPI achieve the inclusion goals it has set for itself. Faced with existing ecosystem issues, e-RUPI may not have been a game-changer, but it is undoubtedly a step forward. Its success is contingent on a favourable atmosphere and conditions, eventually bringing India closer to the digital frontier.

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