By now, the idea of e-RUPI has taken the
market by storm and financial circles are rife with opinions on the
future of e-RUPI. While e-RUPI is still in its primitive stages in
India, countries like the US and Hong Kong have had the concept of
need-based voucher payments for quite some time now. The US
successfully wields a concept similar to e-RUPI with the notion to
help the homeless with food stamps, for educational purposes, to avail
subsidies and benefits. Interestingly, China’s ‘Digital Yuan’ is also
akin to e-RUPI by its attribute of no internet connection.
e-RUPI, a noteworthy advanced payment
system, does not require a bank account, smartphone or internet
connection to avail government subsidies or benefits. It is a person
and purpose-specific payment system wherein an individual can redeem
the said subsidy or benefit from prescribed centers through an SMS
code or an e-voucher. At a glance, the idea of e-RUPI seems quite
similar to RBI’s design of Central Bank Digital Currency (CBDC), a
digital form of government-issued currency aimed at offering cash
subsidies to the underprivileged. While a buildup on CBDC is said to
be in progress, the GOI launched e-RUPI, which as per experts,
addresses the reasons for CBDC’s launch.
Earlier, Jan Dhan Yojana, a zero balance
bank account, was introduced with an intention to cater to 190 million
underbanked and underprivileged through Direct Benefit Transfer (DBT).
In eventuality, it was realized that deep rural areas have little to
no access to bank accounts and several beneficiaries were duped by
intermediaries hence, not yielding the results GOI was anticipating.
E-RUPI’s attribute worth highlighting in this scenario is the
elimination of an intermediary. This virtue alone will cut down
several loopholes and boost timely delivery of government welfare
services. Notwithstanding the attribute, to redeem the SMS code or
e-voucher, the beneficiary will require to visit nearby center
approved by the government and so, a top up plan should be chalked out
to mitigate the risk of fraud at this point of contact.
While e-RUPI is seen as the mode for
welfare services in the first phase, it ensures covering the risk on
merchants as well. Being said that, a service provider will receive
payment only after the transaction is complete. Hence, safeguarding
the interest of the beneficiary and merchants, alike. But, a clear
structure on mitigating risks of a service provider is still unclear.
and the Financial World highlights the benefits and
potential of e-RUPI from a service provider or bank standpoint.
Although e-RUPI is in its pivotal phase
and is catering to the healthcare sector only, to eventually branch
out and cater to all sectors, RBI will robe in more entities who hold
a license for prepaid instruments to issue e-RUPI vouchers seamlessly.
To venture in a phased and safe manner, the RBI has capped the said
vouchers at Rs 10,000 only.
Along with healthcare schemes, e-RUPI has tremendous scope in serving
initiatives like Pradhan Mantri Suraksha Bima Yojana, Krishi Amdani
Bima Yojana, Pradhan Mantri Fasal Bima Yojana etc. Considering 1.36
billion population of India, e-RUPI has a large audience to tap but
only time will tell how successful it shall be.