E-RUPI

 e-RUPI is a voucher-based digital payment solution under UPI (Unified

payment interface). Beneficiaries will get a QR code or SMS string-based voucher
to their mobile phones. They can redeem the voucher without any payments app,
card or internet banking facility.
 e-RUPI will be used to deliver the benefits of welfare schemes to
beneficiaries. In the initial phase, it will be used for welfare schemes in the health
sector.
 Union Bank of India used e-RUPI vouchers for the vaccination drive.

Pros of e-RUPI:

 Through the e-RUPI digital payment solution, the benefits of welfare

schemes can be completely utilized. It is purpose and person-specific. The
present direct benefit transfer scheme does not ensure the appropriate
usage of the cash sent to the beneficiaries. Through the voucher system,
they cannot use the voucher for any other purpose other than the intended
one. For example, if the voucher is sent by the government for girl child
education, the beneficiaries can redeem the voucher to pay the school fees
and not for buying groceries or anything else.
 This also helps in promoting digital payment systems.
 e-RUPI doesn’t require smartphones. So, it is inclusive. It will be super
helpful for unbanked citizens.
 It is cashless, contactless. So, it helps in maintaining social distance
too.
 There will be no delay in passing the benefits of welfare schemes to
beneficiaries.
 It saves money for the government.
 Successful deployment of e-RUPI can boost India’s GDP by 14%.
 It will be easier to roll out Central Bank Digital Currency (CBDC) once
people become used to the e-RUPI digital payment system.
 Helps in maintaining privacy. There is no need to share personal
information while redeeming the voucher.
1. Ensures timely payment as it is a prepaid voucher
2. Offers confidentiality of personal information of
the beneficiaries as it connects users directly to
 the sponsor service providers
3. Allow seamless and faster transaction

Loopholes in the e-RUPI system:

 Some people may exchange the vouchers for cash. As there is no

need to share personal information while redeeming the voucher, there
is no guarantee that the actual beneficiary is utilizing it.
 According to data intelligence firm Data Report, the number of mobile
connections in India as of 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
the population to get a mobile phone to access welfare services via e-RUPI
will be a problem to be solved.

Conclusion:

The e-RUPI system can be a revolutionary concept if implemented well.

Because in general, many beneficiaries face issues while receiving the
benefits from welfare schemes. And many people do not receive the
benefits fully. So, e-RUPI helps people in receiving the full benefits and
ensures that the beneficiaries utilized the amount for the intended purpose.
e-RUPI

Favour:

e-Rupi is a person and purpose-specific digital payment solution. It is expected to be a

revolutionary initiative in the direction of ensuring a leak-proof delivery of welfare services.

e-Rupi is a symbol of how India is progressing by connecting people’s lives with technology,
PM Modi said. It can also be used for delivering services under schemes meant for providing
drugs and nutritional support, Digital India stated.

National Payments Corporation of India (NPCI) in association with the Department of Financial
Services (DFS), National Health Authority (NHA), Ministry of Health and Family Welfare
(MoHFW), and partner banks, has launched the – ‘e-RUPI’.

The users of this seamless one-time payment mechanism will be able to redeem the voucher
without a card, digital payments app or Internet Banking access, at the service provider,
Digital India stated.
e-Rupi’s prepaid feature assures timely payment to the service provider without the
involvement of any intermediary.

Notably, e-Rupi would be shared with the beneficiaries by organizations or Governments

through SMS or QR code.

e-Rupi is contactless and keeps the details of beneficiaries absolutely confidential.

Meanwhile, transaction through e-Rupi is faster and reliable as the required amount is already
stored in the voucher.

The beneficiary will not require to share personal details which redeeming the voucher and
that’s why privacy is maintained

The beneficiaries of this payment system need not have internet banking access, a
smartphone, a card or even a bank account to avail of this service. 

The most important distinguishing feature of e-RUPI compared to other digital payment
systems is that the beneficiary need not be banked. This would translate into higher adoption
rates in rural areas and among economically backward sections of the population.

e-RUPI has a significant potential to support small businesses in taking direct benefit from a
multitude of governments schemes as well.

It will foster financial inclusion in the country. It will also ensure that government services
reach the list mile beneficiaries without leakage of benefits/funds and in a transparent manner.

It will expedite the targeted, transparent, and leakage-free delivery to the endpoint.

Another advantage of e-RUPI is that the government can plug gaps in its digital payments
infrastructure based on the e-RUPI experience, which will go a long way in helping it develop
a Central Bank Digital Currency and ensuring its success.

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

Against:

According to data intelligence firm Data Report, the number of mobile connections in India as
of 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 the population to get a mobile phone to access welfare services via e-RUPI will be a
problem to be solved.

A concern with the system is that with the beneficiary not required to disclose their identity,
these vouchers are also likely to be claimed by other people.

Is e-RUPI a Digital Currency?

No, e-RUPI is not a digital currency. It is a social service voucher system to ensure benefits
reach the intended eligible beneficiaries without any discrepancies and delays. However, it
can be seen as a first step towards having a digital currency in that the experience can help
the government learn more about the digital payments architecture, and the loopholes in the
system.
1. Limited Number of Banks

The system is associated with 11 Banks of India, which means that other regional banks
would have to wait until the platform succeeds nationwide. Many hospitals and medical
institutions may face the same issue.

2. May users still don’t have mobile phones

Many government schemes are meant for disadvantaged and economically weaker sections.
Most of them don’t have access to mobile phones. This means they won’t be able to redeem
the e-voucher as it requires to pair with the QR code at the merchant’s or service provider’s
end.

3. Expiration is one of the concerning disadvantages of eRUPI

Provided that eRUPI is a prepaid service, if a user doesn’t redeem it within a specific period,
the eVoucher will expire. The beneficiary would have to face problems of eRUPI as they don’t
know how to receive it again. The voucher won’t be misused by the service provider but is
also believed to be useless for the beneficiaries if they don’t redeem it timely.

4. Anyone with a user’s phone and details can use eRUPI

Since users don’t need to link their bank account or register elsewhere to redeem the voucher,
the system works entirely through mobile phones. The government still has no provisions to
check if the consumer with a registered mobile number exists or not. In this case, anyone in
possession of a consumer’s mobile can go to the service providers to redeem the eVoucher.

5. Technical Limitations

You may have faced server problems if you use payment gateways such as digital wallets,
UPI, or internet banking. The eRUPI system works the same way as it needs to be constantly
connected. Technological issues are unpredictable and may arise at a point in time. The
government and the issuers of eRUPI vouchers need to make sure there aren’t any
technical disadvantages of eRUPI platform to cause bottlenecks in the process.