At a time when India is celebrating the Amrit Mahotsav on the 75th anniversary of Independence, Prime Minister Narendra Modi, on 2nd August 2021 launched e-RUPI – a digital payment solution. The launch was made via video conference in New Delhi. Through this article, I have tried to explain what e-RUPI is, how it works, and more.
e-RUPI has been developed by the National Payments Corporation of India (NPCI) in collaboration with the Department of Financial Services, the Ministry of Health & Family Welfare, and the National Health Authority. It is basically a cashless and contactless one-time digital payment mechanism. It is delivered via a QR code or SMS string-based voucher and does not require any debit card, credit card, or net banking. The voucher can be both person-specific and purpose-specific.
The foundation for the launch of e-RUPI was laid way back in 2013 when the Government rolled out DBT (Direct Benefit Transfers) to ensure that welfare benefits reach the intended beneficiaries directly without any leakage in between. E-RUPI also aims at limiting the intermediaries between the government and the beneficiary and reduce leakages further. If any organization or individual wants to help someone in their treatment, education, or for any other work, they can give an e-RUPI voucher directly instead of cash. In this way, the money given will be used for the same purpose for which it has been given.
e-RUPI is a prepaid service which means that the user’s account should have the required funds before making any payment. It is a one-time payment only as the beneficiary will have to redeem the voucher in order to receive the good/service. Let us explain this through an example–
Say the Government wants to pay for a particular treatment of an intended beneficiary in a specified hospital. It will deposit money in the beneficiary’s bank account and issue an e-RUPI voucher for a determined amount through a partner bank. The beneficiary will receive an SMS or a QR Code on his mobile phone. He/she can go to the specified hospital, avail of the services, and pay through the e-RUPI voucher received on his phone. The hospital will get its payment directly from the bank. The QR Code/SMS can be redeemed only at the hospital (purpose-specific); the intended beneficiary cannot use the same for any other purpose.
Anyone with a mobile phone can use the e-RUPI app independently. Transactions made through e-RUPI are faster and simpler as the required amount is already stored in the voucher. Beneficiaries will not be required to share personal details while redeeming the voucher and that’s why privacy is maintained. Also, since no physical vouchers are issued, it leads to cost savings as well.
NPCI has currently partnered with 11 banks for e-RUPI transactions which include Axis Bank, Bank of Baroda, Canara Bank, HDFC Bank, ICICI Bank, IndusInd Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India. The acquiring Apps are Bharat Pe, BHIM Baroda Merchant Pay, Pine Labs, PNB Merchant Pay, and YoNo SBI Merchant Pay. NPCI has also tied up with more than 1,600 hospitals where e-RUPI can be redeemed. In the coming days, the user base will be further widened with even the private sector using it to deliver employee benefits and MSMEs adopting it for Business To Business (B2B) transactions. While it has been introduced primarily in the health sector, the Government plans to extend its use for other welfare schemes in the future.
With the launch of e-RUPI, a new dimension has been given to the country’s digital governance. It will play a huge role in strengthening DBT and bring more transparency to digital transactions.
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