Explained: PM Modi Inaugurates e-RUPI, Here's How It Will Work

Prime Minister Narendra Modi on Tuesday virtually inaugurated 'e-RUPI', a one-time prepaid digital voucher that can be redeemed for a specific purpose or activity. The technology is poised to aid direct benefit transfers, but it has commercial applications too.

"e-RUPI will play a big part in making digital transactions and DBTs [direct benefit transfers] in India more effective. Through this, everyone will be aided through targeted, transparent and leakage-proof delivery", said Prime Minister Modi at the event.

e-RUPI has been developed by the National Payments Corporation of India, in conjunction with Department of Financial Services, Ministry of Health and Family Welfare and the National Health Authority on the back of its hugely popular Unified Payments Interface (UPI) platform. UPI saw a lifetime high transaction value of more than ₹6.06 lakh crores in July 2021, spanning more than 3.2 billion transactions.

Beneficiaries of e-RUPI receive the voucher as a QR code or as a code through text message, which they can share with the intended recipient. The NPCI says that since e-RUPI is prepaid, it ensures minimal loss of funds.

Further, it says that the consumer benefits from contactless redemption that does not need an internet connection or a bank account.

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How does e-RUPI work?

e-RUPI is a payments technology that is designed to facilitate its users to redeem a one-time and prepaid voucher at merchants that accept e-RUPI. This voucher can be shared by governmental organisations or corporations, and they can be redeemed without internet banking access or any form of app.

The virtual inauguration of e-RUPI also had a working demonstration of the system.

The intending payer, which could be a government, a corporation or any other such body, can approach an e-RUPI participating bank to send these vouchers to the beneficiaries. Information available with NPCI shows that there are currently 11 participating banks. The State Bank of India, ICICI Bank, Axis Bank, HDFC Bank, Bank of Baroda and Punjab National Bank have made e-RUPI live at both the issuer and acquirer end. Canara Bank, IndusInd Bank, Kotak Mahindra Bank, Indian Bank and Union Bank of India have currently made e-RUPI live only on the issuer end.

Once a beneficiary has an e-RUPI voucher, it can be redeemed at the intended recipient. The QR code or text message needs to be shown, following which the beneficiary will receive a one-time-password on a cellphone which also needs to be shown, following which the voucher is deemed to be redeemed.

The targeted nature of this instrument also means that this voucher is not transferable, and can only be redeemed by the beneficiary having custody of the voucher.

The NPCI has also uploaded a list of hospitals that are currently accepting e-RUPI. This can be found here.

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