e-RUPI – How Does It Work? | A Comprehensive Guide
What is e-RUPI?
India’s Government plans to leverage digital infrastructure for seamless delivery of welfare packages. Taking inspiration from other countries like the United States and Hong Kong, India is introducing a new payment system called “e-RUPI,” utilizing prepaid vouchers for specific purposes. As a fintech pioneer, this move could lead India towards digital currency adoption. E-RUPI, a completely cashless and contactless electronic payment tool, will be sent to beneficiaries’ mobile devices, including non-Android or iOS phones, as a QR code or SMS-based e-voucher. It operates like a coupon, granting access to specified services without the need for additional verification or documentation.
How E-RUPI works
- e-RUPI offers an easy way for people in India without bank accounts or limited internet access to use government services. You don’t need a card or a digital payment app to use it. Each voucher has a specific amount and can only be used once. Payment is made only after the service is received.
- The main difference between UPI transactions and the digital rupee is the backing of physical currency. With e-RUPI, you withdraw the digital currency and store it in your mobile wallet, allowing direct transfers without bank intermediation. It operates similarly to paper money in your wallet, not requiring any bank involvement during transactions.
Technology used in E-RUPI
e-RUPI is a digital currency that you can withdraw and store in your mobile wallet to benefit from e-Rupees. When you transfer money to another person or entity, it moves from your digital wallet to theirs without involving any bank routing or intermediaries. This unique feature makes each e-RUPI transaction one-time, specific to the person and purpose. As a result, concerns about benefits being misused are uncommon, and the process avoids queues, intermediaries, and touts. To proceed with an e-RUPI payment, you’ll need an OTP for added security, ensuring the intended beneficiary remains in control. Moreover, since the beneficiary doesn’t need to provide any personal information, the security encryption is enhanced. E-RUPI covers various services like fertilizer subsidies, nutritional assistance, TB eradication programmes, and Ayushman Bharat schemes. The private sector can also use e-RUPI for employee benefits like travel, dining, and healthcare expenses, replacing cash payments.
Benefits of e-RUPI
- NPCI (National Payment Corporation of India) collaborated with 11 banks for e-RUPI transactions, such as Axis Bank, Canara Bank, Punjab National Bank, Bank of Baroda, HDFC Bank, and Indian Bank Extra.
- Easy and Secure: Voucher authorization involves a verification code shared by the beneficiary and approved by RBI.
- There is no need for cash, credit or debit cards, internet banking, or digital payment apps for e-RUPI transfers.
- Each e-RUPI transaction is person- and purpose-specific, eliminating benefit misuse and avoiding queues and intermediaries.
- Enhanced security with an OTP required during payment without the need for personal information from the beneficiary
- Government programmes can directly benefit small businesses, helping impoverished individuals achieve long-term economic goals.
- The financial integration of residents will be promoted, and public services will efficiently and transparently reach consumers without leakage.
- e-RUPI is a secure and user-friendly solution, benefiting even illiterate individuals.
e-RUPI is a smart digital currency which makes transaction hassle free even if you don’t have a bank account or limited internet access. It is a safe and hassle-free way to process transactions.
