e-RUPI explained — India’s new electronic voucher-based payment system to reduce leakage in welfare programmes

• Prime Minister Narendra Modi will launch a new digital payment solution called e-RUPI.
• Banks will issue electronic vouchers for customers to redeem welfare benefits without having to share bank account details.
• The e-voucher solution has the potential to eliminate fraud and corruption.

The Prime Minister of India, Narendra Modi will be launching 'e-RUPI', an electronic voucher-based digital payment solution at 4:30 p.m IST on Monday.

The person-specific, and purpose-specific, payment solution is developed by the National Payments Corporation of India (NPCI) on its Unified Payment Interface (UPI) platform in collaboration with the Department of Financial Services, Ministry of Health and Family Welfare and the National Health Authority.

What is e-RUPI?

According to a statement from the Prime Minister’s Office, e-RUPI is a cashless and contactless digital payment e-voucher in the form of a QR code or SMS string delivered to the beneficiary's mobile phone.

The e-voucher can be redeemed at the service provider without needing a card, digital payment app or internet banking service.

The e-RUPI is a one-time payment mechanism that does not require any physical interface for transactions and is considered safe as it's prepaid in nature.

It ensures that the payment to the service provider is made only after the transaction is completed without involving any intermediary.

How is e-RUPI different from a virtual currency?

e-RUPI can be used to make payments to a specific person, for a specific purpose, and is not transferable.

On the other hand, a virtual or digital currency is just like normal currency but in digital form and can be used for any transaction.

How are these vouchers issued?

The vouchers will be issued by partner banks but the bank account details of the beneficiary are not needed.

NPCI has built the e-RUPI system on its UPI platform and anyone who needs to issue the voucher would need to approach partner banks with issuing authority.

Entities giving the e-RUPI voucher will have to submit the details of specific beneficiaries and the purpose of the payment to the banks. The beneficiary's identification will be based on their mobile number and name.

What's the need for e-RUPI?

The Indian government says that e-RUPI is expected to ensure a leak-proof delivery of welfare services and minimise fraud and corruption. Since it removes the middlemen and there's no direct cash involved, it eliminates the possibility of the fund being used for a purpose other than intended.

It can be used for delivering services under government welfare schemes like drugs and nutritional support under Mother and Child welfare schemes, TB eradication programmes, drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertiliser subsidies etc.

Not only government schemes but the voucher can also be used by the private sector for employee welfare and corporate social responsibility (CSR) initiatives.





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