By – Tamanna Girdhar
On 2nd August 2021, PM Narendra Modi launched a new digital payment mode – “E Rupi”
It is an e-voucher based payment solution developed by National Payment Corporation of India(NPCI), Department of Financial Services, Ministry of Health and Family Welfare and the National Health Authority, will be a person-specific and purpose-specific payments system.
It is based on a QR Code or a SMS String.
Uses of e-RUPI
The most immediate use of e-RUPI is for welfare payments and services related to health. Its core purpose is to connect the sponsors of the services and service provider without any leakage or scope of corruption.
How does it really work?
e-RUPI is a cashless and contactless digital payments medium, which will be delivered to beneficiaries of mobile phones in the form of an SMS-string or a QR code. This will essentially be like a prepaid gift-voucher that will be redeemable at specific accepting centres without any credit card, debit card, mobile app or internet banking. For example, if the government wants to cover a particular treatment of an employee in a specified hospital, it can issue an e-RUPI voucher for the determined amount through a partner bank. The employee will receive an SMS or a QR code on his feature phone/smartphone. He/she can go to the specified hospital, avail of the services and pay through the e-RUPI voucher received on his phone.
Let’s understand with a help of an example
- Ex: You want to sponsor a vaccination dose for your house help in a private hospital. Now, with the help of E-RUPI you will direct the bank to generate a voucher for the same which shall be received by your house help on his/her/their mobile via SMS or QR Code.
- Now, when the house help reaches the vaccination centre, they can show the e-voucher to the hospital staff. Post this, an OTP shall be received on the househelp’s mobile number and the amount shall be received by the hospital.
💉 ——> OTP ——> 💸
The voucher can be redeemed without use of any card, internet banking or digital payment apps.
How will these e-RUPI 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, which are 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 are the advantages of e-RUPI?
According to the government, e-RUPI is expected to ensure 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 programmes, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertiliser subsidies etc. The government has also talked about giving the benefit of this digital voucher for private sector employee welfare and corporate social.
To begin with, NPCI has tied up with more than 1,600 hospitals where e-RUPI can be redeemed. Experts say, in the days to come, the user base of e-RUPI is expected to widen, with even the private sector using it to deliver employee benefits and MSMEs adopting it for Business To Business (B2B) transactions.
Is it necessary?
The high-level inter-ministerial committee set up to examine the crypto currencies had recommended the introduction of CBDC. RBI is also looking at the pros and cons of introducing a CBDC, which give central banks more control over monetary policy.
Is e-RUPI a crypto currency?
Cryptocurrency is based on blockchain and e-RUPI doesn’t use this kind of technology. RBI is reportedly exploring a Central Bank Digital Currency (CBDC) and this can be a step towards it. Currently, e-RUPI is made on UPI (Unified Payments Interface) platform. The e-RUPI is built for a specific transaction for a service availed at a particular welfare centre.
Use of e-RUPI in private sector
The private sector can leverage these digital vouchers for the purpose of employee welfare and the corporate social responsibility programmes. It can be a replacement for meal vouchers or Amazon gift vouchers.
What are some challenges in implementing e-RUPI?
According to data intelligence firm Data Reportal, the number of mobile connections in India as on January 2020 is equivalent to 78% of the total population. And during the period between January 2019 and January 2020, mobile connections dropped by 1.4%. Enabling the roughly 22% of population to get a mobile phone to access welfare services via e-RUPI will be a problem to be solved.