Prime Minister Shri Narendra Modi on August 2ndlaunched digital payment solution e-RUPI, a cashless and contactless instrument for digital payment
What is e-RUPI ?
e-RUPI is basically a digital voucher which a beneficiary gets on his phone in the form of an SMS or QR code. It is a pre-paid voucher, which he/she can go and redeem it at any centre that accepts its.
The National Payments Corporation of India (NPCI), which oversees the digital payments ecosystem in India, has launched it, a voucher-based payments system to promote cashless transactions.
It has been developed in collaboration with the Department of Financial Services, Ministry of Health & Family Welfare and National Health Authority.
How e-Rupi WORKS?
For example, if the Government wants to cover a particular treatment of an employee in a specified hospital, it can issue an e-RUPI voucher for the determined amount through a partner bank. The employee will receive an SMS or a QR Code on his feature phone / smart phone. He/she can go to the specified hospital, avail of the services and pay through the voucher received on his phone.
Thus it is a one time contactless, cashless voucher-based mode of payment that helps users redeem the voucher without a card, digital payments app, or internet banking access.
To begin with NPCI has tied up with more than 1,600 hospitals where e-RUPI can be redeemed.
Experts say, in the days to come the user base of e-RUPI is expected to widen, with even private sector using it to deliver employee benefits and MSMEs adopting it for Business To Business (B2B) transactions.
Is it a form of Digital Currency?
e-RUPI should not be confused withDigital Currency which the Reserve Bank of India is contemplating. Instead e-RUPI is a person specific, even purpose specific digital voucher.
How is it advantageous ?
- e-RUPI does not require the beneficiary to have a bank account, a major distinguishing feature as compared to other digital payment forms.
- It ensures an easy, contactless two-step redemption process that does not require sharing of personal details either.
- Another advantage is that it is operable on basic phones also, and hence it can be used by persons who do not own smart-phones or in places that lack internet connection.
- It is expected to play a major role in strengthening Direct-Benefit Transfer and making it more transparent. Since, there is no need for physical issuance of vouchers, it will also lead to some cost savings as well.