e-RUPI : Read the Uses and Scope of India’s New Digital Rupee

What is e-RUPI?

The e-RUPI voucher is an end-to-end digital solution to sponsor benefits and services to beneficiaries. e-RUPI can be issued by the sponsor with the support of Issuer banks. It is a cashless contactless voucher-based payment system, redeemable without a card, digital payments applications or access to internet banking.

It is a person and purpose-specific digital voucher, which is transmitted and received in the form of SMS or QR Codes.

What is the Maximum Amount for e-RUPI vouchers?

The cap on the amount for each voucher is INR 1,00,000/- for Government schemes and INR 10,000/- per voucher for Private entities.

Who can issue e-RUPI vouchers?

e-RUPI can be issued only by banks authorized by RBI to issue Prepaid Payment Instruments (PPI) and who are participating as Payment Service Providers (PSP) in the UPI ecosystem.

Who can avail the facility of e-RUPI?

The e-RUPI voucher is allowed to be redeemed for Person to Merchant (P2M) purchases only.

Is offline mode of creation/redemption of vouchers available?

The voucher issuance format will be digital only for e.g. QR code, SMS string etc. The Issuer Bank/Payer PSP may also send the communication for issuance of the e-RUPI voucher to the end beneficiary via another mode basis on the Sponsor request (digital mode only).

What is the validity of an e-RUPI Voucher?

The validity of the e-RUPI voucher shall be defined by the Issuer Bank/Payer PSP as per the use case (Maximum validity per voucher – 1 year).

Can e-RUPI be redeemed for cash/cashback?

e-RUPI shall be permitted to be redeemed only for the purchase of goods and services from designated merchants bearing valid Merchant Category Code (MCC), as may be defined by the Issuer at the time of issuance of e-RUPI. e-RUPI shall not be permitted for cash out or cash back on redemption.

How does e-RUPI work?

1. Corporate/Government Department (Sponsor) shares information (specify the fields like name, mobile no, amount, expiry date, purpose of the voucher etc.) to issue eRUPI to Issuer Bank.
2. Issuer Bank/Payer PSP initiates the request to generate e-RUPI to National Payments Corporation of India (NPCI).
3. NPCI responds to Issuer Bank/Payer PSP with success confirmation.
4. Issuer Bank/Payer PSP confirms e-RUPI generation back to Corporate /Government Entity, to be further distributed to the beneficiary in the form of QR or SMS string by the Bank/Sponsor.
5. Beneficiary reaches the merchant with e-RUPI for redemption.
6. Merchants scan e-RUPI vouchers for validation, verify beneficiaries, and initiate redemption requests.
7. Post successful redemption confirmation, the merchant provides service to the beneficiary.

Why e-RUPI and not conventional modes of cash transactions?

For Governments and Private entities

• e-RUPI ensures that the voucher is redeemed by the person and for the purpose defined at the time of issuance.
• e-RUPI is an end to end digital solution from issuance to redemption that makes the distribution process more transparent and easy to track.
• It will lead to cost savings as well since there is no need for physical issuance of eRUPI.
• Quick, safe & contactless voucher distribution.

For Customers

• There is no prerequisite for a beneficiary to avail e-RUPI i.e e-RUPI does not require the customer to have a bank account etc., a major distinguishing feature 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.
• e-RUPI is operable on feature phones also, and hence it can be used by the beneficiary who does not own smartphones or in places that lack an internet connection.

Which laws provide the legal framework for e-RUPI?

Banking Regulations Act. 1949

Payment and Settlement Systems Act, 2007 (PSS Act)

Section 43A of IT Act, 2000 and the IT Rules, 2011

Section 25 of the Payment and Settlement Systems Act, 2007 (PSS Act)

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