‘e-RUPI’ – a digital solution – was launched by the National Payments Corporation of India (NPCI) in association with the Department of Financial Services (DFS), National Health Authority (NHA), Ministry of Health and Family Welfare (MoHFW), and partner banks. It was revealed by the PM, Narendra Modi, in a video conference. Reserve Bank of India (RBI) Governor Shaktikanta Das and various heads of banks were in attendance.
“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,” read a description on the NPCI website.
e-RUPI only requires the receiver to have a mobile phone number to which the sponsor can share the pre-paid voucher simply via an SMS or a QR code.
The use of this platform is expected to make the process of extending vouchers and subsidy benefits easier. It can be expected to see wider adoption by private players and government bodies alike.
Kashif Raza, Co-Founder of Crypto Kanoon, breaks it down, “Whenever the government wants to extend monetary benefits like Direct Benefit Transfers (DBT) to migrants during the pandemic, for example, tracking the beneficiaries was a challenge. Now they can share the funds with e-RUPI by just having a database. Additionally, the elimination of a bank account helps ensure that the beneficiary is not dependent on anyone to avail the benefits.”
Former Economic Affairs Secretary SC Garg weighs in, “The e-RUPI can fulfil some requirements for extending benefits which were not fulfilled by earlier instruments. It is not a currency. Currency should be a bearer instrument that can be transferred and can be further used. Here it is personalized and purpose-specific – it’s not money, forget digital currency, it’s not even currency.”
Garg also believes that while this can work parallel to existing platforms, it cannot replace any of those. “The UPI, for example, is a far more versatile instrument and has helped reduce the use of cash to a large extent. The e-RUPI will not come anywhere near to replacing any current channels,” he adds.
Interestingly, the launch came days after RBI Deputy Governor R Rabi Sankar said the regulator was working towards a phased implementation strategy of the Central Bank Digital Currency (CBDC), prompting whispers of e-RUPI’s ties to the CBDC.