On August 2, 2021, the Government of India has launched eRupi. The platform has been developed by the National Payments Corporation of India (NPCI), Department of Financial Services, Ministry of Health and Family Welfare and the National Health Authority. This platform is intended to be a person-specific and purpose-specific payments system.
What is eRupi?
Unlike its name suggests, it is not any form of cryptocurrency or bitcoin. It is an electronic voucher based digital currency designed in cashless contactless digital payment medium.
eRupi stands for ‘Electronic Rupee Unified Interface’. eRupi is the advanced version of the UPI payment system, designed keeping in mind BHIM UPI. It will be used through SMS and QR codes. It will be sent in the form of a ‘QR (Quick Response)’ code to those who have smartphone and through SMS (Short Message Service) to those who do not have smartphone.
Why eRupi?
eRupi is a payment solution designed to remove the problems of payment system in India and the problems of rigging. It is aimed to reach out directly to beneficiaries for various benefits/ subsidies declared by Government of India, without any interference of middleman. This will work for a specific person with a specific need. This means it will be given for a specific purpose and only the specific person to whom it is given will be able to do that work.
How eRupi Functions?
e-Rupi is a cashless and contactless digital payment solution system and it will be sent directly to the beneficiary’s mobile through SMS, QR Code. This will essentially be like a prepaid gift-voucher that will be redeemable at specific accepting centres 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.
It is just like gift vouchers such as Amazon gift card, Phonepe voucher, Google pay gift voucher etc, where one can redeem the voucher and do shopping online. eRupi functions similarly. No one else can use this voucher except holder of voucher. One can redeem the voucher only for things specified in it for the specified amount.
How eRupi vouchers will be issued?
The system has been built by NPCI on its UPI platform, and has onboarded banks that will be the issuing entities. Banks can issue their own eVoucher. 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. If the person has an account in any bank and uses the UPI App, then he can create a voucher himself and can send it to another person as a gift voucher. For this, the name and mobile number of the beneficiary are necessary, only then QR code and SMS can be sent.
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. Because it is still in its initial phase, so government will initially use e-RUPI for government organizations. And in future it will available for private sectors also.
Through this, the government will send direct vouchers to all the beneficiary in the country, such as medicines under the TB identification program, facilities like Ayushman Bharat, Pradhan Mantri Yojana, fertilizer subsidy and nutritional support will be given through this. At present, it is being implemented on health sector benefits. In future, it will be implemented in other schemes also.
Along with this, private sector companies can also use it to give all these facilities to their employees and when everything goes right, it may become an electronic currency which can be used by anyone and everywhere in the country. You can make payment through this.
Whether there is any web application for eRupi?
Until now there is no separate mobile app for eRupi. According to NPCI, it will be integrated with UPI App and users can use it from there itself. This means in all the UPI apps, one can see the usage of e-Rupi. In the UPI app itself one can see all the new updates of e-Rupi. All the details of Government benefits can be viewed from UPI app itself. It would be advisable to use the mobile number of beneficiary to fill the form of National Scheme or the phone number which is registered with beneficiary’s bank account. Because the vouchers will be sent to the beneficiary according to his/her mobile number, it is better if same mobile is used, in order to get the benefit.
Benefits of eRupi?
Benefits for Corporates
- Corporates can enable well-being of their employees;
- End to end digital transaction and doesn’t require any physical issuance hence leading to cost reduction;
- Voucher redemption can be tracked by the issuer;
- Quick, safe & contactless voucher distribution.
Benefits for hospitals
- Easy & Secure – Voucher is authorized via a verification code;
- Hassle free & Contactless payment collection – Handling of cash or cards is not required;
- Quick redemption process – The voucher can be redeemed in a few steps and lesser decline due to pre-blocked amount.
Benefits for Consumer
- Contactless – Beneficiary should not carry a print out of the voucher;
- Easy redemption – 2 step redemption process;
- Safe and Secure – Beneficiary doesn’t need to share personal details while redemption hence privacy is maintained;
- No digital or bank presence required – Consumer redeeming the voucher need not have a digital payment app or a bank account.
Earlier, when any subsidies used to get declared in the form of any concession / rebate, reimbursement was provided to companies offering such products. This kind of public distribution system hardly used to reach to its real beneficiaries. Such practices only lead to corruption as mostly middleman would take away benefits and no one was answerable as there was no proper system to take accountancy.
With the introduction of Aadhar and the Jan Dhan account system, such subsidies could directly reach out to bank of real beneficiaries, under the direct transfer scheme. However, this did not solve problems for masses as those eligible for subsidies, probably do not have bank account / knowledge of keeping bank account. Many were still receptive of keeping their money in bank account.
Accordingly, in order to reach out to real beneficiaries in right manner in right time, system of a voucher-based system plays significant role. This will not only reach to masses at large, but also easy to redeem. It 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 specificity of its purpose makes it different to a virtual currency and puts it closer to a voucher-based payment system. Also, the ubiquitousness of e-RUPI in the future will depend on the end-use cases.
Also, better accountability of each such government actions could be kept in radar by general public. This not only benefits beneficiary but also creates awareness amongst such masses about the ruling party at the Government of India. As it is said, actions are louder than words, with such system in place, public at large would now be able to gain access far more easily with greater awareness about such authorities.
