e-RUPI – The Cashless and Contactless Digital Voucher

any specific government services and what is exciting about this digital system is that it does not require any card, app, or internet access to redeem the vouchers, but the digital tokens will be sent to respective citizens by the government. These digital tokens will be sent either through SMS strings or QR codes and are to be used for a specific purpose.

Moreover, the digital token-style system is being viewed as a way that would not only help in identifying potential gaps in the existing welfare payments infrastructure but is seen as a way to fix them as well.

How does e-RUPI work?

e-RUPI - the cashless & contactless medium works similar to how Sodexo coupon cards provided by corporates work. However, the huge difference here is, there won’t be any card given to the beneficiaries. The beneficiary will be provided with digital vouchers in order to access targeted welfare services. These include medicines & nutritional support and medical diagnosis that would be under the government’s healthcare schemes.

When the beneficiary wants to make use of the aforementioned welfare services, they should show the QR code or SMS-string to the welfare service provider, which was sent to them. Only then the transaction would be complete and there wouldn’t be any need or requirement for printouts. Also, since these vouchers are created for a particular purpose, they can neither be transferred nor cashed out by anyone.

Powered by National Payments Corporation of India’s UPI platform, e-RUPI’s service has onboarded around 12 public and private banking institutions to be issuing entities. While the beneficiaries will be identified by their mobile number and the digital vouchers linked to those numbers, they can be redeemed only by that individual.

The Government of India is also in the plans of opening the service to private enterprises. This is mainly because the government wants the private enterprises to use it as part of their employee welfare programs. If the private enterprises choose to use e-RUPI for their employees' welfare, they should approach one of the banks that has been partnered for e-RUPI, along with details of specific employees and also the service they would like to opt for.

e-RUPI - a digital currency?

e-RUPI is not a digital currency and it is only built for a specific transaction for a service to be availed at a particular welfare center and these digital vouchers are backed by the Indian rupee and are not transferable. Therefore, this places e-RUPI within the framework of a voucher-based payment system rather than a virtual currency that has a different character.

Challenges in the implementation

In India, the number of mobile connections as of January 2020 was equal to seventy-eight percent of the total population of the country and between the period that is January 2019 to January 2020, the mobile connections came down by 1.4%, as per a report from Data Reportal. And therefore, enabling roughly twenty-two percent of the Indian population to buy a mobile phone in order to access welfare services through e-RUPI will be a challenge difficult to be solved.