e-RUPI, THE NEW DIGITAL PAYMENT

INSTRUMENT OF INDIA*

Introduction
The honorable Prime Minister of India Mr. Narendra Modi has been launching digital
initiatives from time to time. The Government of India is also participating in the digital
revolution under the flagship programme called Digital India launched on July 01, 2015 with a
vision to transform India into a digitally empowered society and knowledge economy.

BHIM- Unified Payments

Interface
Digital India Initiatives

DigiLockers

E-Hospitals

E-Pathshala

In 2013, the Government of India shifted to a system of Direct Benefit Transfer (DBT), where
the Union government used Jan Dhan Accounts*, Aadhaar numbers and mobile numbers to
verify the details of a beneficiary. In this case, when a subsidy was claimed, such as for food
grains, the money was transferred to bank account of the beneficiary. During the COVID-19
pandemic, the Union government had announced a Rs. 1.7 lakh crore DBT package as part of
the Pradhan Mantri Garib Kalyan Yojana (PMGKY). There were some issues pertaining to
accessing bank accounts, Aadhaar authentication failures, etc. The Government wants to find a
solution to remove this problem and e-RUPI is the answer to stop the leakages in the system.

* Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to
financial services, namely, a basic savings & deposit accounts, remittance, credit, insurance, pension in an
affordable manner. Under the scheme, a Basic Savings Bank Deposit (BSBD) which is also called Jan Dhan
Account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet, by persons not
having any other account.

* CA Sarika Verma, Assistant Director, The ICSI

Views expressed in the Article are the sole expression of the Author and may not express the views of the
Institute.

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What is e-RUPI?
e-RUPI is one time cashless and contactless payment mechanism launched on August 02,
2021. It is a Digital platform which will be used for making digital payments and to strengthen
the Direct Benefit Transfer (DBT) scheme and digital transactions [Business to Business
(B2B) transactions] among Micro, Small, and Medium Enterprises (MSMEs). It is like the
precursor of a Central Bank Digital Currency (CBDC). National Payments Corporation of India
(NPCI) in association with Department of Financial Services (DFS), Ministry of Health and
Family Welfare (MoHFW), National Health Authority (NHA), and partner banks, together
associated in development of the ‘e-RUPI’.

How to use e-RUPI?

e-RUPI is a QR code or SMS string-based e-voucher which will be
delivered to the mobile of the users. It is operable on basic
phones also, and hence it can be used by persons who do not
own smart-phones or in places that lack internet connection. The
users will be able to redeem this voucher without any digital
payment app, internet banking, or card. This initiative will A Quick Response
connect the sponsor of services with the beneficiaries and (QR) code is type of
service providers. The connection will hold in a digital manner barcode easily
without any kind of physical interface. Being a prepaid voucher, readable with digital
e-RUPI would assure real time payments to the service provider. devices like
smartphones. They
store information as
Who can use e-RUPI? a series of pixels in a
Private sector in addition to the Union Government & State square grid that can
Governments may use e-RUPI payment system for the benefits of be read in two
their employees or for their CSR initiatives. Any government directions - top to
agencies and corporation can generate e-RUPI vouchers via their bottom and right to
partner banks. Interested entity and the beneficiary will linked left - unlike standard
through the e-RUPI and send the voucher with the help of barcodes that can
participating banks. If any organization wants to help someone only be read top to
in their treatment, education or for any other work, then they bottom.
will be able to give an e-RUPI voucher instead of cash.

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As per the NPCI, eleven banks as per details given below can help to issue e-RUPI:

Acquiring App /
Sr. No. Bank Name Issuer Acquirer
Entity

1 Axis Bank ✔ ✔ Bharat Pe

BHIM Baroda
2 Bank of Baroda ✔ ✔
Merchant Pay

3 Canara Bank ✔ NA
e-RUPI
4 HDFC Bank ✔ ✔ HDFC Business App Voucher
It is basically a
Bharat Pe &
5 ICICI Bank ✔ ✔ digital voucher
PineLabs
which a
beneficiary gets
6 Indusind Bank ✔ NA on his phone in
the form of an
SMS or QR
7 Indian Bank ✔ NA code. It is a
pre-paid
8 Kotak Bank ✔ NA voucher, which
he/she can go
and redeem it
Punjab National at any centre
9 ✔ ✔ PNB Merchant Pay
Bank that accepts its.

State Bank of
10 ✔ ✔ YONO SBI Merchant
India

Union Bank of
11 ✔ NA
India

Source: [Link]
Presently the NPCI has tied up with more than 1,600 hospitals where e-RUPI can be
redeemed. The List of Live Hospitals on e-RUPI is available at
[Link]

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Voucher Issuance and Redemption Procedure

The e-RUPI application is available on Google play store or Apple App Store. It can be easily
downloaded from there. The process for issuance and redemption of voucher is given below
for easy understanding of the reader.

A Corporate or A Government
They will approach the
agency want to issue a
Partner banks
voucher

Banks require details of NPCI (Issuing Authority) will

benfeciary and purpose issue the Voucher

Beneficiary have to show

Salesperson requires to scan
the e-RUPI QR code or SMS at
this QR code or SMS
the service provider outlet

Once the service provider

Beneficiery will recieve an
enters the OTP and proceeds,
OTP which he needs to show
the payment will be made
to the service provider
automatically

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Benefits of e-RUPI

•Contactless - Beneficiary should not carry a print out of the

voucher.
•Easy redemption - Only 2 step redemption process.
For •Safe and Secure - Beneficiary doesn’t need to share personal
details while redemption hence privacy is maintained.

Consumers •No digital or bank presence required - Consumer redeeming

the voucher need not have a digital payment app or a bank
account.
•No smartphone is required- It is operable on basic phones
and internet connection required.

•Easy & Secure - Voucher is authorized via a verification code.

•Hassle free & Contactless payment collection - Handling of
For Hospitals 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.

•Payment processes is contactless.

For •Corporates can enable well-being of their employees.

•End to end digital transaction and doesn’t require any

Corporates physical issuance hence leading to cost reduction.

•Voucher redemption can be tracked by the issuer.
•Quick, safe & contactless voucher distribution.

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Difference between e-RUPI, Unified Payments Interface (UPI), Cryptocurrency and

Central Bank Digital Currency (CBDC)

Central Bank
Basis for Unified Payments
e-RUPI Cryptocurrency Digital Currency
difference Interface (UPI)
(CBDC)

Unified A Central Bank

Payments A Digital Currency
e-RUPI is one Interface (UPI) Cryptocurrency (CBDC) is the
Meaning time cashless is a system that is a digital or legal tender
and contactless powers multiple virtual currency issued by a
payment bank accounts that is secured central bank in a
mechanism. It is into a single by digital form. It is
a Digital mobile cryptography, the same as a
platform which application (of which makes it fiat currency
will be used for any nearly and is
making digital participating impossible to exchangeable
payments. bank), merging counterfeit or one-to-one with
several banking double-spend. the fiat
features, currency.
Type
seamless fund
routing &
merchant
payments into
one hood. It is a Digital It is a Digital
It is an e- Currency.
voucher. Currency.
It is an
application used
for receipt or
Regulator payment of
money.
The National Not yet
Payments regulated in Reserve Bank of
Corporation of India. India.
India. Reserve Bank of
India.

Cryptocurrencies
It can be can be used for CBDCs can only
Uses redeemed at UPI used for speculative be used for
service receipt or purposes and for payments and
providers payment of payments as other monetary
counters. money. well. transactions.

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Conclusion
United States of America, South Korea and several other countries have used similar voucher
based initiatives for welfare services. The main objective and long-term vision behind e-RUPI
is to reach 190 million unbanked citizens of the India and fold them into a formal financial
system, and close part of the digital gap. This digital payment system can provide equal access
to financial, healthcare, and welfare services to each and every citizen of our country. It also
expected that the successful deployment of e-RUPI can boost India’s GDP by 14 per cent.
Apart from fast-tracking digital payments, e-RUPI will also accelerate direct benefit disbursals
at the last mile and help bring the unbanked and underbanked into the financial inclusion
fold.
References :
1. [Link]
2. [Link]
3. [Link]

***

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