e-RUPI: Indian Government’s Entry Into Crypto

The Indian government has announced the launch of a digital currency to improve the payment transaction mechanism in a leak-proof manner, taking another step towards digitization. On August 2, 2021, Prime Minister Narendra Modi unveiled e-RUPI, a digital payment system via video conferencing. On the UPI platform, the Department of Financial Services, the Ministry of Health and Family Welfare, the National Health Authority, and the National Payments Corporation of India collaborated to create this evolutionary instrument.

If you don’t have internet access, you can use e-RUPI to make digital payments without cash. An e-voucher with a QR code or SMS is given to the beneficiary to complete transactions quickly. Using a QR code or SMS string-based e-voucher, the voucher can’t be misused. There’s no need to use a card, digital payment apps like Paytm, or net banking to redeem the voucher at a later date.

In the beginning, it will be applicable to health beneficiaries. People who want to take vaccines from private centres, by paying… if someone wants to help around 100 poor people with the vaccination, they can give e-RUPI voucher to them so the money is used only for that purpose.

Prime Minister, Narendra Modi.

According to the government’s announcement, e-RUPI is based on the NPCI’s UPI system. As a result of its system, government welfare services will be provided with complete security. Initial deployment will be with the National Digital Health Mission to promote the covid-19 immunization drive, but can also be used to deliver services under the medicine and nutritional assistance schemes.

What is e-RUPI?

A major goal of e-RUPI is to prevent any form of leakage in government welfare programmes while ensuring that benefits reach those who need them most. e-RUPI, a futuristic digital payment method, offers the following-

  • Only the person to whom the voucher is issued can use it.
  • It is a one-time payment mechanism that allows a user to redeem the voucher without the need for bank cards, digital payments apps, or net banking.
  • The e-RUPI payment system is prepaid and does not require the use of an intermediary to complete the transaction.
  • e-RUPI can be used to deliver services under schemes that provide ‘drugs and nutritional support under mother and child welfare schemes, TB eradication programmes, drugs and diagnostics under schemes like as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertiliser subsidies, and so on.
  • Because e-RUPI is a contactless payment system, it is simple, safe, and secure to use;
  • It keeps the beneficiary’s information completely confidential; and
  • The transaction that takes place through the voucher is relatively faster and more reliable, because the amount for the transaction is already stored in the voucher.

Can you use e-RUPI?

The e-RUPI voucher can only be used for the stated purpose and cannot be used for other transactions.

If the money is sent by the government for books, then e-RUPI will ensure that only the books are purchased. If money has been sent for the uniform, then it should be spent in its use, if money has been sent for fertilizer, then it should be spent in it.

PM Narendra Modi

By using this technology to transfer LPG gas subsidies, ration amounts, and money from other social security programmes straight to the bank accounts of relevant beneficiaries, the government has already saved an astounding amount of ₹1.78 crores.

E-RUPI features can be used by the private sector for employee welfare and corporate social responsibility programmes.

e-RUPI : The Advantages

  • To use this payment system, recipients do not require internet banking access, a smartphone, a card, or even a bank account.
  • The most essential distinction between e-RUPI and other digital payment systems is that the beneficiary does not need to be banked. This would result in higher adoption rates in rural areas and among economically disadvantaged segments of the population.
  • e-RUPI has the potential to help small firms immediately benefit from a range of government initiatives, and it will promote financial inclusion in the country. It would also ensure that government services reach list mile beneficiaries without benefit/fund leakage and in a transparent way.
  • It will accelerate targeted, transparent, and leakage-free delivery to the endpoint. Another advantage of e-RUPI is that the government may use the experience to fill holes in its digital payments infrastructure, which will go a long way toward assisting it in developing a Central Bank Digital Currency and assuring its success.
  • e-RUPI is easy, safe and secure as it keeps the details of the beneficiaries completely confidential.

e-RUPI can be used by corporations, consumers, and hospitals in the following ways:

For Corporations

  • Corporations may support their employees’ well-being by using the e-RUPI digital payment system.
  • It is simple for the issuer to track voucher redemption.
  • e-RUPI does not require physical issuance, resulting in cost savings
  • Voucher distribution is quick, safe, and frictionless

For Consumers

  • A consumer does not need to carry the voucher printout.
  • Redeeming the voucher is a two-step process.
  • A beneficiary does not need to share personal information to redeem the voucher.
  • Beneficiaries do not need to have a bank account or use digital payment applications to use the voucher

For Hospitals

  • A verification code is used to authorise all coupons.
  • The voucher can be redeemed in a few simple steps.
  • There will be no transaction decline since the voucher will be pre-blocked with the amount.
  • There will be no need for cash or credit cards to complete the transactions.

PM Narendra Modi concludes his remarks by explaining that DBT benefits can be easily accessed through e-RUPI. – “e-RUPI vouchers are purpose-specific. It will ensure that the benefits of the voucher are availed for the service it is meant for. e-RUPI voucher is going to play a huge role in making DBT more effective in digital transactions in the country. This will help everyone in Targeted, Transparent and Leakage Free Delivery.”

How to redeem an e-RUPI voucher?

E-RUPI voucher redemption is a straightforward process that does not require one to submit personal information with the service provider such as credit card numbers or banking information. They just have to follow the steps.-

  • The beneficiary must present an e-RUPI SMS or QR code at the service outlet;
  • A salesperson will scan the QR code or validate the SMS;
  • An OTP will be delivered to the beneficiary, which must be shared with the salesperson; and
  • Payment will be made upon submission of the OTP.

The Future of e-RUPI

With the advancement of Artificial Intelligence, the popularity of cryptocurrencies such as Bitcoin has skyrocketed in Indian marketplaces. However, the rise in the currency-to-GDP ratio is one of the reasons why the Reserve Bank of India (RBI) has begun to explore the usefulness of digital currencies. Still, several precautions must be put in place before digital currencies can be considered successful.

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Divya Singh
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