e-RUPI was launched recently by the Prime Minister of India. It is said to be a voucher-based digital payment mechanism. How different is it from something like a Sodexo coupon or a gift card? Or is it a digital currency that RBI touted to be launching? We will see the various aspects of this newly launched digital payment solution in this blog post. 

What is e-RUPI?

e-RUPI is a digital voucher-based payment platform launched by the government of India. It is developed by the National Payments Corporation of India (NPCI) in collaboration with the Department of Financial Services, Ministry of Health and Family Welfare, National Health Authority, etc. 

What is the goal of the e-RUPI?

The primary goal of the government is to achieve leak-proof delivery of welfare schemes to the intended beneficiaries through e-RUPI. e-RUPI is a person and purpose-specific digital payment solution offered by the government. This way it is easy for the government to ensure that the benefits reach the right beneficiary for the specified purpose only. The Direct Benefits Transfer(DBT) is another popular solution for leak-proof delivery of services. But still, the end beneficiary needs to have a bank account in the case of DBT. However, in the case of e-RUPI, since it is a voucher-based system, the beneficiary doesn’t need to have a bank account. 

How do e-RUPI Vouchers work?

We will use a few examples to simplify the concept of e-RUPI. For simplicity, we can assume it like a gift card that we get from e-commerce sites like Flipkart or Amazon. When you buy a gift card from a particular website, you can redeem it only at that site and not from another site. In the same way, when you get an e-RUPI voucher, you can use it to redeem it for goods or services earmarked for that voucher. 

The beneficiary gets the QR code or a unique SMS string-based voucher code on his mobile phone. The beneficiary can redeem this code at the service provider and utilize the service. e-RUPI is not a digital currency as some speculated. It is not even a currency because e-RUPI is not backed by underlying assets.

What are some use-cases of e-RUPI?

Definitely, why not! Various ministries or departments can use this voucher-based e-RUPI system to deliver services. For example, say, delivery of food and medicines and nutritious food to lactating mothers, children in Anganwadi’s. It can also be used for the delivery of medical services and diagnostics under schemes like the Pradhan Mantri Jan Ayushman Yojana(PMJAY). The list goes on.

These vouchers can also be useful for the private sector. So another use case may be the delivery of employee welfare schemes and CSR programs. Some companies can even use these e-RUPI vouchers to offer vaccination for the employees. So there are plenty of use-cases for e-RUPI digital payment solutions.

Conclusion

The e-RUPI, in hindsight, seems to be a game-changer in the long-run. If successful, it can address the decades-old problem of leakages in the delivery of benefits and services to the needy. NPCI has got a very good reputation with the launch of revolutionary UPI. UPI payment system has won many accolades worldwide for taking fintech to the hinterlands of India. We wish the same success for NPCI with e-RUPI!