What is E-RUPI ? Its Functioning Pattern and Reason Behind its Launch

E- RUPI is a new initiative from the Indian Government for promoting digital payments. The government wants to modernise the payment modes and hence improve the liquidity inside the country. There is one specific reason behind the launch of it. This mode of payment is specifically for some entities who have partnership with government agencies and bodies. The person taking the same can use it or the specific purpose only. Hence the mode of this currency is bound by limitations. If a person has been assigned money for a purpose, he or she cannot use it for any other purpose. 

This mode is developed by the Finance Ministry, CBDC and NPCL. There is a specific functioning pattern attached to this mode. The currency not only is based on online modes but also improves on the grounds of usage control.

Functioning Pattern

The E-RUPI system is completely dependent on mobile phones. The agencies would send away QR Code and SMS messages. These would be decoded at the end user (merchant for which the E-RUPI is issued). Thus the redemption of the voucher received in the form of QR Code or SMS would be done at the merchant’s place. Also this voucher cannot be redeemed for any other purpose.

Another speciality is that being a totally cashless payment mode, there are chances of leak of confidential information. However there is a surety assurance from the government that there would be no confidential leak. Also it is an easy, safe and secure mode of payment.

Aadhar card linking is not required in this mode. Also the bank details are niche in this mode of payment. All that’s required is the mobile phone number of the person. With that only one gets the ability to use this mode of payment. The reason why E-RUPI has been focused on mobile phone usage is the excessive usage of mobile phones in urban as well as rural areas in India.

Reason Associated with the Launch

The major reason to launch the E-RUPI is to filter various routes through which the money supplied by the government was utilized. In a way it will disable all the purposeless usage of money and give direct access to only those merchants towards whom the credit has been issued. This will move the liquidity in one direction as per planning. 

Also it will be applied across multiple government schemes. There would be two benefits associated with the same. One is that all the people taking advantage of this system will get used to the digital mode of payment. Also another benefit is that the government can keep a track of all the expenses. Thus this will make the payment only valid towards the pre-decided and declared purposes. The government is planning to apply it on various projects. The first declaration is to give it access to vaccination payment. Also there are multiple other purposes that are decided by the government for the initial phase. Some of them are Ayushman Yojna, Hospitalization expenses, Medical and drug purchase expenses etc. All the facilities provided by the government would be covered under this digital mode of payment.

Banks Linked with E-RUPI

There are multiple banks associated with this purpose. Also all these banks are the top banks of India. They are :- HDFC Bank, Union Bank of India, State Bank of India, Kotak Mahindra Bank, Punjab National Bank, IndusInd Bank, ICICI Bank, Axis Bank, Bank of Baroda, Indian Bank and Canara Bank. 

Benefits to Multiple Parties

All the procedures are really easy to use. Hence one can easily access it and make payments. The system follows a simple 2 step verification procedure which is standard mode in today’s online world. There is no digital presence required for the customers. Also the beneficiaries and customers have no barriers in between. Hence from customer to beneficiary the cycle is quite simple. 

With tracking facility for vouchers it becomes easy for the corporates as well to access such payment modes. Also the voucher is authorized through one verification code which makes it more safe and secure. These features aid not only the individuals but also the corporates. 

The major benefit is available to all the citizens as the government ensures this would not provide any leakage on their front. The data and every transaction detail is safe and secure. No details can be leaked during this transaction procedure. Also the fertilizer schemes are associated with this mode of payment. This will enable the farmers to get direct benefit without any knowledge about the online mode of payment or transfers. Many government schemes are linked with the payment gateway such as Mother and child welfare schemes and TB schemes. Hence the entire hospitality segment is put up at the prime focus along with the farmers. 

This will empower and diversify and modernise the Indian payment gateway. It will also provide a safe and secure mode of payment.