e-RUPI: Purpose specific prepaid e-RUPI vouchers can now be issued for individuals by PPIs

The Reserve Bank of India (RBI) has allowed non-bank Prepaid Payment Instrument (PPI) issuers to issue e-RUPI vouchers. Further, the central bank has also permitted the issuance of e-RUPI vouchers on behalf of individuals. “At present, purpose-specific vouchers are issued by banks on behalf of central and state governments and to a limited extent on behalf of corporates. Keeping in view the benefits for users and beneficiaries alike, it is proposed to expand the scope and reach of e-RUPI vouchers by a) permitting non-bank Prepaid Payment Instrument (PPI) issuers to issue e-RUPI vouchers and b) enabling the issuance of e-RUPI vouchers on behalf of individuals,” the RBI said in its June monetary policy committee.”It is also proposed to enable issuance of e-Rupee vouchers on behalf of individuals and to simplify the process of issuance and redemption and a few other aspects of the current framework. These measures will make the benefits of e-RUPI digital voucher accessible to a wider set of users and further deepen the penetration of digital payments in the country,” said RBI Governor Shaktikanta Das while announcing the decisions of the monetary policy committee.

What is e-RUPI and how will it work?
e-RUPI is a contactless cashless voucher which a user gets on his or her phone in a form of an SMS or QR code. He or she can go and redeem it at any centre that accepts it.

For instance, if the central government wants to cover a particular treatment of an employee in a specified hospital, it can issue an e-RUPI voucher for the determined amount through a partner bank. The employee will receive an SMS or a QR Code on his feature phone/smartphone. He/she can go to the specified hospital, avail of the services and pay through the e-RUPI voucher received on his phone.

How will e-RUPI benefit the customers?

e-RUPI does not require the beneficiary to have a bank account or debit card or credit card. This is one of the major distinguishing features as compared to other digital payment forms. “It ensures an easy, contactless two-step redemption process that does not require sharing of personal details either.” the Ministry of Finance said in a release earlier. Another advantage is that e-RUPI is operable on basic phones also, and hence it can be used by persons who do not own smartphones or in places that lack an internet connection, it added. “e-RUPI is expected to play a major role in strengthening direct-benefit transfer and making it more transparent. Since there is no need for physical issuance of vouchers, it will lead to some cost savings as well,” the ministry added.

The cap on the amount for e-RUPI vouchers issued by the government has been set at Rs 1,00,000 per voucher. The central bank has also allowed the use of the e-RUPI voucher multiple times (until the amount of the voucher is completely redeemed).

“The expansion of e-RUPI vouchers, with the inclusion of non-bank Prepaid Payment Instrument issuers and individual issuance, signifies a major stride towards promoting financial inclusivity and accessibility,” said Rajsri Rengan, India Head of Development, Banking, and Payments, at FIS.