e-RUPI, India’s New Digital Payment Solution

The recently launched e-RUPI is India's new welfare-focused digital payment system. Let's see how it will work and potentially impact the industry.


On 2nd August 2021, Prime Minister Narendra Modi launched a new digital payment system – e-RUPI – that can send government benefits directly to recipients’ mobile phones. e-RUPI is developed by the National Payments Corporation of India (NPCI), Department of Financial Services, National Health Authority, and Ministry of Health and Family Welfare. 

e-RUPI is a sealing system that provides non-transferable services to citizens. This unique digital system will detect and repair potential gaps in the existing social benefits infrastructure of India.

What is the e-RUPI system?

The e-RUPI is a digital coupon that a recipient can use to avail a specific government service. The digital system does not require a card, app or internet connection to redeem coupons. The government will send the digital code to interested citizens for specific purposes via SMS thread or QR code.

How does e-RUPI work, and where can it be used?

This non-monetary and contactless medium is designed to provide immediate direct benefits to citizens. Under e-RUPI, beneficiaries will receive digital vouchers to take advantage of targeted healthcare services such as medical, nutritional and diagnostic support within the government support system.

The government will send the QR code or SMS string to the beneficiaries, who will then show it to the provider to complete the benefit transaction. Since these coupons are made for a specific purpose, they cannot be transferred or redeemed for cash.

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NPCI's UPI platform supports e-RUPI, and about ten banks have joined the service as issuing entities. These include private and public banking institutions.

e-RUPI Benefits to the Consumer

No Contact: The recipient beneficiary need not carry a printout of the voucher.

Easy Recovery: a two-step rotation process.

Secure and Reliable: The Beneficiary does not have to share their documents during the refund period, thereby safeguarding privacy.

No Registration or Bank Account Required: Users are not required to have a digital payment application certificate or bank account.

What can the industry expect from this new technology?

The government is considering opening e-RUPI services to private enterprises as part of their employee welfare or benefits programmes. While banks and payment systems play an essential role in this ecosystem, hospitals and companies can also use this technology. 

In the future, e-RUPI will be used for other government Direct Benefit Transfer (DBT) schemes. Currently, 54 DBT programs are administered by 54 ministries. However, not all projects are suitable for everyone. Data from the National Information Center (NIC) currently shows that 7.32 trillion transactions have been processed and benefits worth approximately Rs. 1.42 trillion have been disbursed.

Services such as FASTag for vehicle taxes, the DigiLocker tool for tickets and electronic documents and the 59 minutes loans for entrepreneurs in micro, small and medium enterprises (MSMEs) have been highly valued by the industry and entrepreneurs in recent years. Most prominently, BHIM UPI made it easy for businesses to transact money and empowered the poor in carrying out their businesses and transactions easily. 

As government support bolsters in adopting technology and leveraging it for connecting multiple sectors and people directly, even new businesses working on digital innovation can ensure rapid service delivery using technology and reap the benefits of government aid.

Aakash Sharma
Aakash Sharma
Aakash writes on Startup Ecosystem, Policies, Legal and Regulatory aspects of business planning. An alumnus of Delhi University, he is assistant editor at Dutch Uncles.

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