Prime Minister Narendra Modi launched the electronic voucher based digital payment system ‘e-RUPI’ in 2021, as a first step towards introducing digital currency in India. Developed by the National Payment Corporation of India (NPCI) with the support of the Ministry of Health and Family Welfare, and the National Health Authority, it aims to bridge the digital gap among the unbanked population of the country. The main objective behind the launching of the e-RUPI is to provide equal access to healthcare, financial and welfare services to the millions of unbanked, underprivileged citizens of the country.

What is e-RUPI?

e-RUPI is an electronic voucher based digital payment system that enables the users to redeem the voucher at any center accepting it. The users can redeem the voucher without the necessity of a card, digital payment app or internet banking access. It was launched on 2^nd August 2021 by Prime Minister Narendra Modi, as a cashless, contactless digital payment system to ensure seamless transfer of benefits to the citizens in a leakproof manner.

The main purpose of this electronic payment system is to enable the government to provide welfare-based support directly to the beneficiaries in a safe and secure manner. The e-RUPI is shared with the beneficiary for a specific purpose or activity by organizations by means of SMS or QR code. It is mostly used for government schemes like the Pradhan Mantri Jan Arogya Yojana, Ayushman Bharat and various subsidies offered by the government.  For example, if the government wants to cover a particular treatment of a beneficiary at a specified hospital, it can issue an e-RUPI voucher for the particular amount through a partner bank.

Features of e-RUPI 

• e-RUPI is developed by the National Payment Corporation of India (NPCI) as a voucher-based payment system to promote cashless transactions. 
• The Ministry of Health and Family Welfare, the National Health Authority, and the Department of Financial Services are the collaborating partners
• e-RUPI is a person specific, purpose specific digital voucher that the beneficiary gets on his phone in the form of an SMS or QR code
• It is a cashless, contactless electronic payment system in which the sponsor of services is connected with the beneficiary and service providers in a secure and transparent environment.
• It is pre-paid which the beneficiary can redeem at any center that accepts it.
• It is not interchangeable with cash or currency and can be redeemed only for the specific use case that it has been created for.
• Government benefits of up to Rs.1 lakh via e-RUPI are allowed without a bank account or the internet.
• e-RUPI is expected to increase the effectiveness of welfare policies by applying the social security schemes to the exact targeted beneficiaries
• Using this platform, the government plans to provide drugs and nutritional support to underprivileged women and children, TB eradication programs, drugs and diagnostics under schemes like Ayushman Bharat, Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies and more.
• e-RUPI can also be used by employers under the employees’ welfare schemes and corporate social welfare programs.

Important Key Features of e-RUPI

• e-RUPI can be issued only by banks authorized by the Reserve Bank of India to issue the Prepaid Payment Instruments (PPI) and who are participating as Payment Service Providers (PSP) in the UPI ecosystem.
• The issuer bank is responsible for initiating a request to create the prepaid voucher on the UPI. The bank has to adhere to the RBI’s PPI directives with regard to issuance and operation of the e-RUPI prepaid voucher.
• e-RUPI can be shared with the beneficiaries only in digital form. The payment process is contactless and personal information of beneficiary need not be shared
• Sponsors who can request for issuing the e-RUPI vouchers can include businessmen, corporates, state and union government departments. But they should be KYC compliant. 
• The maximum limit for e-RUPI voucher is set at Rs.10000/- at present. For covid 19 and related healthcare services 10 e-RUPI vouchers can be issued on a single mobile number.
• The e-RUPI vouchers have a defined validity as per the specific case subject to a maximum validity period of one year from the date of issue.
• e-RUPI vouchers can be redeemed only for the goods and services from the designated merchant categories or the acceptance points as defined by the issuing banks at the time of issue. The merchants will be provided with the facility or technology to scan and redeem the vouchers by the issuing bank.
• The key distinguishing feature of the e-RUPI payment system is that the beneficiary does not need to have a bank account or mobile app compared to other digital payment systems. Neither are smart phones or internet connections needed for using this payment system.
• Dispute management, customer grievance redressal has to be taken care of by the banks and the sponsors. 
• The e-RUPI should not be confused with the Central Bank Digital Currency, which is under consideration by the RBI. A clarification to this effect has been issued by the Government. e-RUPI is a person and purpose specific prepaid digital e-voucher, different from digital currency.

Purpose of Introduction of e-RUPI

The basic aim for the introduction of e-RUPI is to ensure that the benefits of the welfare schemes of the government should reach the beneficiaries in a transparent and leakproof manner. It also aims for the inclusion of the unbanked section of the population into the financial fold and bridge the digital gap. NPCI has partnered with more than 1600 hospitals in which the e-RUPI vouchers can be redeemed and also used by the National Health Authorities as cashless payment for covid 19 vaccination. The beneficiaries will receive an SMS or QR code in their phones which they can redeem at the hospitals.

Working of e-RUPI

• First the issuer issues an e-RUPI voucher to the beneficiary and the money of the issuer is blocked by the bank
• The beneficiary receives the voucher via SMS or QR code on his phone
• To avail the specific benefit the beneficiary will display the voucher received in SMS or QR mode to the service provider
• The service provider will scan the e-RUPI voucher and after validation provides the service to the beneficiary.
• After the transaction is completed, the blocked money of the issuer will be transferred to the service provider.

Benefits of e-RUPI

• It is delivered via SMS or QR code and does not require card or net banking or mobile app. It runs on the UPI platform.
• It is operable even on basic phones and can be used by those who do not own smartphones or in places lacking internet connection.
• It is a one-time contactless, cashless, voucher-based mode of payment and helps users to redeem the e- RUPI voucher easily.
• It is safe as it is prepaid in nature. The voucher can be person and purpose specific. e-RUPI transactions are faster and secure.
• The e-RUPI voucher can be used more than once, until the amount in the voucher is totally redeemed.
• e-RUPI does not require the beneficiary to have a bank account, which is the major distinctive feature compared to other digital payment forms.
• It ensures an easy, contactless two-step redemption process that does not require sharing any personal details.
• e-RUPI can play a major role in strengthening the direct benefit transfer making it more transparent. 
• As there is no physical issuance of vouchers, it can also lead to some cost savings.
• It is also advantageous to the service providers because there is assurance of real time payment as e-RUPI is a prepaid voucher.

Also Read: Ayushman Bharat Yojana Scheme, Benefits, Eligibility Criteria and Application Process

List of e-RUPI issuing banks

As per the NPCI, at present it has tied up with 11 banks for e-RUPI transactions. They are:

• Axis Bank
• Bank of Baroda
• Canara Bank
• HDFC Bank
• ICICI Bank
• Indian Bank
• IndusInd Bank
• Kotak Mahindra Bank
• Punjab National Bank, 
• State Bank of India  
• Union Bank of India

The acquiring Apps are Bharat Pe, BHIM Baroda Merchant Pay, Pine Labs, PNB Merchant Pay and Yono SBI Merchant Pay. 

More banks and acquiring apps are expected to join the e-RUPI initiative soon as per the government website.

FAQs

Where is e-RUPI mainly used?

Answer: To start with, NPCI has tied up with 1600 hospitals where e-RUPI can be redeemed. The use base of e-RUPI is expected to widen with the private sector also using it to extend employee benefits and MSMEs using it in Business to Business (B2B) transactions.

What are the problems that e-RUPI intends to address?

Answer: The problems that e-RUPI intends to address in the long term are the leakages in welfare delivery mechanisms due to multiple touchpoints, and the limited reach of welfare payments to the unbanked population who may not have a bank account or a smartphone.

How is e-RUPI different from digital currency?

Answer: e-RUPI is a prepaid digital voucher mainly utilized to provide welfare subsidies to the eligible beneficiaries. It is issued to a specific person for a specific purpose only. The beneficiary does not require to have a bank account which is the major distinguishing feature compared to other currencies. Whereas digital currency proposed by RBI is legal tender issued by the central bank of the country. It is the same as sovereign currency and is exchangeable one-to-one at par with the fiat currency, as mentioned by RBI.

e-RUPI represents India’s progress by connecting people to technology. It is helpful in delivering services under schemes meant for providing drugs and nutritional support to women and children. It is immensely useful in protecting the health of the poor and vulnerable in Pradhan Mantri Jan Arogya Yojana, Ayushman Bharat schemes. 

Conclusion

The e-RUPI vouchers are a safe and secure form of payment for the beneficiaries of the government health insurance schemes, at the hospitals, thus providing health security to the marginalized section of the population. The healthcare system of the country is a reflection of its progress. The many benefits of e-RUPI make it ideal for providing diagnostic and treatment services to Ayushman Bharat PMJAY beneficiaries.