What Is e-RUPI Voucher And How Will The Expansion in Limit Help Welfare Scheme Beneficiaries?

The Reserve Bank of India (RBI) has enhanced the cap under e-RUPI prepaid digital vouchers. The present cap of Rs10,000 will be increased to Rs1 lakh per voucher and can be used more than once.

“To facilitate digital delivery of various government schemes to the beneficiaries, it is proposed to increase the cap on the amount for e-RUPI vouchers issued by the government to Rs 1,00,000 per voucher and allow the use of the e-RUPI voucher multiple times (until the amount of the voucher is completely redeemed),” said RBI governor Shaktikanta Das on Thursday.

What Is e-RUPI?

e-RUPI was created keeping in mind beneficiaries of government welfare schemes. It is a cashless, contactless, and purpose-specific payment instrument that can be used by individuals, corporates or governments for making digital payments. e-RUPI is a safe and secure payment instrument as it keeps the beneficiary’s information completely confidential.

It is a QR code or SMS-based e-voucher which gets delivered to the mobile of the beneficiary. The user can redeem the voucher without any payment app, internet banking, or card.

“The e-RUPI voucher can be sent directly to the phone of the beneficiaries of a scheme by the government or corporates. It is a contactless payment service in which the QR code is scanned on the e-RUPI voucher by the service provider, triggering a verification code that gets delivered to the beneficiary phone number. Once this verification code is shared with the service provider, the voucher gets redeemed automatically,” says Dilip Modi, founder, Spice Money, a rural fintech company.

e-RUPI can be used for P2P and B2C transfers and ensures monetary support to citizens without the involvement of intermediaries. It also enables corporates to extend employee and community welfare schemes.

“eRUPI’s key benefit for governments is in enabling penetration among the unbanked and feature phone users, without needing the recipient’s bank account or KYC,” says Reeju Datta, co-founder, Cashfree Payments, a payment disbursal platform. Also, there is no need for an internet connection on the beneficiary's phone to use the e-RUPI facility.

The Benefits Of The Policy Announcement

According to experts, the move to allow the use of e-RUPI vouchers multiple times will help address various challenges, including low penetration, faced by the rural population.

At present, e-RUPI is mainly used for disbursal of government benefits, primarily for Covid-19 vaccinations. The former cap of Rs10,000 also restricted its use for smaller value use-cases; the larger cap will expand its scope. “The proposal will help in the delivery of various government schemes to the beneficiaries more efficiently,” says Datta.

He added that it may help to extend the facility to other stakeholders. “Extending this new cap to other B2C use-cases should also be considered, by improving the acquiring infrastructure for eRUPI and integrating it with existing POS systems. This will also encourage its use by private corporates and for other customer segments as well, such as larger value corporate gifting, transit/payroll/student cards, forex travel cards, etc,” says Datta.

Union Bank of India, State Bank of India, Punjab National Bank, Kotak Bank, Indian Bank, IndusInd Bank, ICICI Bank, HDFC Bank, Canara Bank, Bank of Baroda and Axis Bank are some of the banks that provide the e-RUPI facility.