Innovating Financial Inclusion: The e-RUPI Initiative in India

e-RUPI is a targeted electronic voucher created to ensure that the designated funds are delivered to the intended recipient and can solely be utilized for the precise purpose it was intended for. It operates as a cashless system, making it person and purpose-specific.

The objective is to establish an efficient and secure delivery system with minimal logistics for various government Direct Benefit Transfer (DBT) programs nationwide. The digital e-voucher platform can also serve organizations seeking to contribute to welfare services by using e-RUPI instead of cash, ensuring a leak-proof and accountable process.

What sets apart the normal rupee used in cash transactions from digital transactions?

The primary distinction lies in the utilization of e-RUPI by a designated individual for a particular purpose, ensuring the funds are directed solely for that specific use.

For instance, if a farmer is provided with an e-RUPI voucher to purchase fertilizer for their crops, the voucher’s usage is restricted solely to acquiring fertilizer, and it cannot be utilized for any other purpose.

The implementation of e-RUPI enhances security against potential misuse by middlemen in DBT. Nevertheless, there remains a possibility of middlemen resorting to covert arrangements to illicitly benefit from the system.

Below are the entities engaged in the creation and redemption of e-RUPI vouchers:

Issuer Bank/Payer PSP: The issuing bank or payment service provider (PSP) is responsible for initiating the request to create an e-RUPI voucher with NPCI.

Sponsor: The sponsor refers to a corporate entity, a State or Union Government department, or a business customer of the bank who requests the bank for the creation of an e-RUPI voucher.

e-RUPI beneficiary: The person who receives the e-RUPI voucher is known as the e-RUPI beneficiary. It's important to note that an e-RUPI beneficiary may not have a UPI (Unified Payments Interface) account or be a bank account holder.

Designated Merchant: Designated merchant are specific voucher acceptance points where e-RUPI voucher can be redeemed/used.

Acquiring Bank/Payee PSP: Acquiring bank/Payee PSP shall be providing facility/capability to designated merchants to accept the e-RUPI voucher for redemption.

NPCI: NPCI is the owner, network operator, service provider, and coordinator of the UPI Network.

e-RUPI Work Flow:

You can go through: https://www.npci.org.in/what-we-do/e-rupi/product-overview

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