What is e-RUPI: Cashless, contactless instrument for digital payment

NPCI in association with Department of Financial Services, National Health Authority, Ministry of Health and Family Welfare, and partner banks has launched e-RUPI

Staff Writer   /   August 5, 2021

On August 2, Prime Minister Narendra Modi launched a digital payment solution e-RUPI, a person and purpose specific digital payment solution. e-RUPI is a cashless and contactless instrument for digital payment. e-RUPI voucher is going to play a huge role in making DBT (direct benefit transfer) more effective in digital transactions in the country and  will give a new dimension to digital governance. Let us find out more about this unique instrument.

e-RUPI explained

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 merchants accepting e-RUPI.

e-RUPI would be shared with the beneficiaries for a specific purpose or activity by organizations or Government via SMS or QR code.

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

The entire transaction process through this voucher is relatively faster and at the same time reliable, as the required amount is already stored in the voucher.

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 merchants accepting e-RUPI. e-RUPI would be shared with the beneficiaries for a specific purpose or activity by organizations or Government via SMS or QR code.

State Bank of India, HDFC Bank, Axis Bank, Punjab National Bank, Bank of Baroda, Canara Bank, IndusInd Bank, and ICICI Bank are e-RUPI bank partners.

Why it is important

e-RUPI is aimed at bridging the digital gap among the unbanked population. The beneficiaries or users of this payment mechanism will not require a card, digital payments app, or internet banking access to redeem the voucher.

e-RUPI transaction process will keep the details of the beneficiaries completely confidential, maintaining their privacy.

There are 190 million unbanked citizens and e-RUPI will fold them into a formal financial system, and close this part of the digital gap.

Is this a digital currency?

Many view the introduction of e-RUPI as the first step towards having a digital currency in India.

However, e-RUPI in its current form in itself is not a digital currency. At this moment, it is a social service voucher system.

A cryptocurrency or digital currency will let you buy goods and services, or trade them for profit. But e-RUPI as a prepaid voucher will be utilized, at least initially, to provide welfare subsidies.

Also, do note that while cryptocurrency is based on blockchain, e-RUPI is based on UPI systems.

The USA, South Korea and several other countries have used similar voucher-based incentives for welfare services.

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