Prime Minister Narendra Modi on Monday launched a new digital payment mode — e-RUPI, which aims to ensure that government’s monetary benefits directly reach citizens. This is another initiative in line with the goal of ensuring ‘leak-proof’ delivery of benefits. Here’s what you need to know.
What Is It?
Developed by the National Payments Corporation of India (NPCI) in collaboration with the Department of Financial Services (DFS), the Union Health Ministry and the National Health Authority (NHA), e-RUPI “is a cashless and contactless instrument for digital payment", the Prime Minister’s Office (PMO) said. It is founded on the Unified Payment Interface (UPI) platform created by NPCI that allows seamless real-time bank transfers and payments in India.
e-RUPI is designed to be a person- and purpose-specific digital payments solution that seeks to ensure that government schemes reach “intended beneficiaries in a targeted and leak-proof manner, with limited touch points between the government and the beneficiary".
How Does It Work?
The e-RUPI system relies on mobile phones and is intended to be a seamless, one-time payment mechanism. A beneficiary is to receive a QR code or SMS string-based e-voucher on her mobile phone which can be redeemed at the service provider — for instance a hospital or health centre — without the need for any card, digital payments app or internet banking access.
For instace, the NHA said that e-RUPI would allow a “cashless payment solution for Covid-19 vaccination". It adds that the contactless e-RUPI is “easy, safe and secure as it keeps the details of the beneficiaries completely confidential".
Since it is a prepaid voucher, NHA said that using it is quick and hassle-free with a two-step redemption process in which only the mobile phone and e-voucher is required. It said that among the banks that are live with e-RUPI are State Bank of India, HDFC Bank, Axis Bank, Punjab National Bank, etc.
Whom Will It Benefit?
The PMO said that the e-RUPI system can be used for “delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes and TB eradication programmes". With the Union Health Ministry and NHA as aprtners, it will also be utilised to extend drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana — the national health insurance scheme for lower income groups — fertiliser subsidies, etc.
The PMO said that even the private sector can “leverage these digital vouchers as part of their employee welfare and corporate social responsibility programmes". NHA added that the advantage of using e-RUPI is that voucher redemption can be tracked by the issuer.
Mobile Phone Penetration In India?
While the DBT scheme relies on the troika of Jan Dhan accounts, Aadhaar numbers — although Aadhaar is not mandatory — and mobile phones, the e-RUPI system will not require users’ bank account details. The only requirement is for the beneficiary’s mobile phone number. The DBT scheme notes that it relies on 100 crore mobile connections to reach aid to beneficiaries.
Reports note that while over 85 per cent of the urban Indian population owns a mobile phone, in 2019, for the first time, rural users at 277 million outnumbered users in urban areas 227 million. It is also estimated that two out of every three users will have a mobile phone by 2023, while one in two users will have a smartphone.