e-RUPI: A Major Step Towards Digital Transformation

e -RUPI is a cashless and contactless instrument for digital payment developed by the National Payments Corporation of India (NPCI)in collaboration with the Department of Financial Services (DFS), the Union Health Ministry, and the National Health Authority (NHA). Founded on the Unified Payment Interface(UPI) platform created by NPCI, e-RUPI is designed to be a person and purpose-specific digital payments solutions.

It ensures that government schemes reach “intended beneficiaries in a targeted and leakproof manner with limited touch points between the government and the beneficiary”.

What is digital e-RUPI?

Giving a further boost to the Digital payment system in the country e-RUPI was Launched on August 2nd, 2021 by Honorable Prime Minister Shri Narendra Modi Ji.

e-RUPI allows small-ticket person-specific and purpose-specific payments via digital vouchers. The system relied on mobile phones and was intended to be a seamless, on-time payment mechanism.

The instrument acts as an e-voucher which is based on a QR code or SMS string, delivered to the mobile phones of recipients, and can be redeemed at a service provider (e.g. hospital or health care center) without the need for any card, or digital payments app or internet banking access.

e-RUPI can be used for the Covid vaccination process in which government agencies and corporates can issue these vouchers to pay for vaccines.

What is digital e-RUPI?
Digital Payment Image Credit: pib.gov.in

Small ticket subsidies can be transferred using these vouchers. 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 programs, drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana(the national health insurance scheme for lower income groups), fertilizer subsidies, etc.

Even the private sector can use this digital voucher as part of their employee welfare and corporate social responsibility programs. e-RUPI requires no hard copy or copy of the voucher for redemption.

This platform connects the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface.

It also ensures that payment is made to the service provider only after the transaction is completed. It is pre-paid in nature, so it assures timely payment to the service provider without the involvement of any intermediary.

The greatest advantage of using e-RUPI is that the voucher redemption can be tracked by the issuer. It ensures that the money given by any organization is used for the same work for which it is given.

What is digital e-RUPI?
e-RUPI Image Credit: pib.gov.in

This e-RUPI voucher is different from other online payment applications in a way that e-RUPI is not a platform. It is a voucher meant for specific services.

e-RUPI vouchers are purpose-specific and even if one does not have a bank account or a digital payment app or a smart phone can benefit from these vouchers.

According to National Health Authority, eight banks are already live with e-RUPI, including State Bank of India, HDFC, Axis, Punjab National Bank, Bank of Baroda, Canara Bank, IndusInd Bank, and ICICI Bank. The financial technologies that are associated with this project include Pine Labs and Bharat Pe.

Digital E-RUPI: How It Works

As far as working is concerned it is based on the following steps enumerated below: In the first step, three categories of voucher issuing entities have been duly approved by RBI namely Banks, Payment service Providers which hold licenses for pre-paid instruments.

The voucher has a maximum payment limit of Rs.10,000. It is non-transferable and can be used for a single transaction only. In the second step fulfilling these above pre-conditions, a government agency or corporate can now approach a bank to issue e-RUPI vouchers to the beneficiaries duly identified for the same.

Initially, the identity will be linked to mobile numbers. Now in the next step, the beneficiaries will be sent QR-code or SMS-based vouchers on their registered numbers.

This is followed by a one-time password at the time of redemption of the voucher as a second factor for authentication. There is no requirement for beneficiary bank account details.

In the last step application at the merchant’s end will be scanned and the e-voucher and the OTP to be accepted.

It is well known that the role of middlemen poses a serious threat in the delivery of government aid to people as it allows leakage and creates a huge block that ends up depriving the ultimate beneficiaries.

A significant step towards the goal of reducing duplication and fraud in welfare schemes was the launch of the Direct Benefit Transfer (DBT) in the year 2013, which utilizes modern technology and IT tools to achieve a faster flow of funds and accurate targeting of beneficiaries.

e-RUPI is easy, safe, and secure as it keeps the details of the beneficiaries completely confidential.

Here the system is designed in such a way that it enables beneficiaries to access government services in a cashless manner thus removing the need for intermediaries. the e-RUPI voucher will make digital transactions more prevalent in the country thus playing a vital role in making DBT more effective.

e-RUPI will prove a major step in the direction of transparent governance as it will ultimately benefit the targeted beneficiary. It will give a new dimension to digital governance.

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