e-RUPI: India’ First Step Towards Having a Digital Currency

Prime Minister Narendra Modi is taking a step forward in developing a digital currency in the country. Today, at 4:30 pm. Narendra Modi will launch an electronic voucher-based digital payment system 'e-RUPI' via video conference. The platform will be a person-based and purpose-based payments system that has been developed by the National Payments Corporation of India (NPCI), the Department of Financial Services, the Ministry of Health and Family Welfare, and the National Health Authority.

Working of e-RUPI

Basically, e-RUPI is a contactless and cashless medium of digital payments which will be imparted to recipient's mobile phones in form of an SMS string or a QR code. This will be like a prepaid gift voucher that will be redeemable at particular accepting centers without any credit or debit card, a mobile app, or internet banking. e-RUPI will connect the sponsors of the services with the recipients and service providers in a digital manner without any physical interaction.

Issuing of Vouchers

The NPCI has built this system on its UPI platform and has provided guidelines to the banks that will be issuing entities. Any corporate or government agency will have to approach the partner banks with the details of specific persons and the purpose for which payments have to be made. The partner banks are both private and public-sector lenders. The recipients will be recognized using their mobile number and a voucher allotted by a bank to the service provider in the name of a given person would be delivered to that person.

Use Cases of e-RUPI

As the government said, e-RUPI is anticipated to ensure a sealed delivery of welfare services. It can also be used for providing services under schemes that are meant for supplying drugs and nutritional support under Mother and Child welfare schemes, TB removal programs, drugs & diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies, etc. Also, the private sector can make use of these digital vouchers as a part of their employee welfare and CSR (Corporate Social Responsibility) programs, said the government.

Importance of e-RUPI

For the success of the future digital currency, the launch of e-RUPI could efficiently underline the holes in digital payments infrastructure. This is necessary because the government is already working on creating a CBDC (central bank digital currency). Though e-RUPI is still backed by the Indian rupee, its purpose makes it different from a virtual digital currency and puts it closer to a payment system that is based on vouchers.