e-RUPI is like a prepaid voucher which can be redeemed without any card, digital payments app or internet banking access at the merchants which accept e-RUPI voucher. This is an end-to-end digital transaction and does not require any physical issuance of card or voucher leading to cost reduction. e-RUPI is a digital solution powered by National Payments Corporation of India (NPCI).
One important distinction between e-RUPI and other existing digital forms of payment is that it does not require the beneficiary to have a bank account. Another important characteristic of e-RUPI is that it is operable on non-smart phones also, and hence it can be used by persons who do not own smart-phones or in places that lack internet connection. It will be sent to the user in form of an SMS (for non-smartphone users) or QR Code (for smartphone users). A beneficiary will be required to show the QR code or the SMS message to the merchant, who will scan the same and a verification code will be sent to the beneficiary’s phone number. The latter will have to share the code with the merchant and the payment will be successful. This allows for making digital payments- and not just in a traditional way, i.e. from digital sender to digital receiver but from digital sender to offline receiver as well.
Both these characteristics- no requirement of bank account and no need for an internet connection are crucial to help come over the challenges of digital gap and financial inclusion in India. As per data available from TRAI, there are 34.6 rural internet subscribers per 100 population in the country as opposed to 104 in urban areas as on December 2020. Further, out of the total bank branches, 33.5% bank branches in rural areas, 27.5% in semi-urban, 19.3% in urban and 19.7% in metropolitan areas as on end-June 2021.
NPCI has partnered with 11 banks for e-RUPI transactions. They are Axis Bank, Bank of Baroda, Canara Bank, HDFC Bank, ICICI Bank, Indian Bank, IndusInd Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India and Union Bank of India. Overtime, more banks are expected to join. The acquiring Apps are Bharat Pe, BHIM Baroda Merchant Pay, Pine Labs, PNB Merchant Pay and YoNo SBI Merchant Pay. Further, M-Swipe has also included e-Rupi as a mode of payment. NPCI also partnered with various hospitals where e-RUPI can be redeemed.
This is expected to be beneficial for all, including government, corporates, service providers and users.