E-Rupi To Usher In Person-Specific, Purpose-Specific Digital Payments

The e-Rupi, to be launched by Prime Minister Narendra Modi on Aug. 2, will allow for small-ticket person-specific and purpose-specific payments via digital vouchers. These vouchers can be generated by the government or corporates via banking partners and redeemed by beneficiaries via a QR-code or an SMS-based mobile identifier.

“The e-RUPI is a cashless and contactless instrument for digital payment. It is a QR code or SMS string-based e-Voucher, which is delivered to the mobile of the beneficiaries,” said a statement issued by the government’s press information bureau on Saturday. “The users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app or internet banking access, at the service provider.”

The newest addition to India’s payment service offerings has been developed by the National Payment Corporation of India, together with banks and financial technology companies. It has the approval of the Reserve Bank of India.

According a person familiar with the project, who spoke on condition of anonymity, the e-RUPI will work in the following way.

As a first step, three categories of voucher issuing entities have been approved by the RBI—banks, payment service providers and entities which hold licences for pre-paid instruments.

The pre-conditions set for the voucher include a maximum payment limit of Rs 10,000. The voucher can be used for a single transaction and is non-transferable.

Within these pre-conditions, a government agency or a corporate can approach a bank to issue e-RUPI vouchers to an identified set of beneficiaries. The identity, initially, will be linked to mobile numbers.

These beneficiaries are sent the QR-code or SMS-based voucher on their mobile phones. This is followed by a one-time-password at the time of redeeming of the voucher as a second factor of authentication.

At the merchant end, all that’s needed is an application to scan and accept the e-Voucher and the OTP.

A number of banks have come on board as partners. This includes HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., State Bank of India, Bank of Baroda, among others. Pine Labs and BharatPe are among the financial technology companies that have joined through project.

As a start, e-RUPI can be used for the Covid vaccination process, where government agencies and corporates can issue these digital vouchers to pay for vaccines for a set of people, said the person quoted above. Subsequently, a number of other use cases such as small-ticket subsidies can be transferred via e-RUPI vouchers, this person said.

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