e-RUPI Digital Currency : India to get new digital payment mode with launch of e-RUPI - What’s new and how does it work

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What is e-RUPI

and what’s new

What services are covered under e-RUPI

e-RUPI can be used by corporates too for employee benefits

Which banks are supporting e-RUPI

Banks that are fully supporting e-RUPI:

Banks that will only issue e-RUPI coupons:

Who has made e-RUPI

Prime Minister Narendra Modi is introducing a new digital payment mode under UPI known as ’e-RUPI’. The purpose of this new payment mechanism is to ensure that the government can extend monetary support directly to citizens in a “leak-proof manner” in the form of prepaid e-voucher powered by UPI. The entire e-RUPI platform is highly-targeted and can be only used for making payment for the purpose it has been issued. It can be considered somewhat like a ‘Sodexo coupon’ that the government will pass on directly to citizens, so that they can use it without having access to online banking, payments apps or other traditional payment modes. For example, if an e-RUPI voucher is generated to pay money for vaccine or medicine then it can be used only for that purpose.With e-RUPI, it can be expected that the ‘unbanked’ section of our society will easily get access to financial support for health services, child welfare, medicines, fertilizer subsidies and more.The new digital payment mode– e-RUPI– is basically a prepaid voucher that can be issued directly to citizens after verifying mobile number and identity. Instead of putting cash in someone’s bank account, a prepaid e-RUPI voucher will be delivered in the form of a QR code or SMS string-based e-voucher to the beneficiary’s mobile number.This QR code or SMS voucher can be used only once by the person on whose name it has been issued. The beneficiary can redeem the voucher without a card, digital payments app or internet banking access, at the service provider. Also, the payment can only be processed after the service has been provided to the beneficiary.The biggest advantage is that there’s no need to use any app or have access to internet banking to use this service. So, anyone with any kind of mobile phone having a valid phone number can walk-in with an e-RUPI SMS or QR code to get service. Also, as it’s a prepaid voucher, the beneficiary already has access to the money when required. There’s no physical interface by anyone in the payment process and the entire transaction is digital, cashless and contactless.The government wants to use e-RUPI as a “leak-proof delivery of welfare services” that can used for delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes, TB eradication programmes, drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies and more.The private sector can use e-RUPI vouchers as part of their employee welfare and corporate social responsibility programmes. Your office may issue e-RUPI vouchers to cover travel, food, healthcare, etc. The concept is similar to how coupon and meal passes work at your office.Right now, there are 11 banks supporting e-RUPI. Note that some banks can only issue e-RUPI vouchers but cannot accept them. Thankfully, major banks like State Bank of India , ICICI Bank, HDFC Bank, Punjab National Bank and others are fully supporting e-RUPI for issuing e-RUPI coupons as well as redeeming them.State Bank of India, ICICI Bank, HDFC Bank, Punjab National Bank, Axis Bank and Bank of Baroda.Canara Bank, Indusind Bank, Indian Bank, Kotak Bank and Union Bank of India.The entire digital payments ecosystem in India has come together to enable e-RUPI. National Payments Corporation of India ( NPCI ) along with the Department of Financial Services (DFS), National Health Authority (NHA), Ministry of Health and Family Welfare (MoHFW), and 11 partner banks has introdcued e-RUPI.

e-RUPI could be bigger than UPI, say experts

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The government’s latest digital payments offering, e-RUPI, permits offline transactions which can be carried out on feature phones, promoting its adoption in rural and remote areas as well.

This could potentially lead to large-scale adoption of the payment solution as even the popular Unified Payments Interface (UPI), preferred in urban and semi urban areas, requires internet connectivity and a smart phone.

The beneficiary does not even require a bank account or a digital app to use the voucher.

Also see: Explained | What is e-RUPI?

“The e-RUPI voucher will be shared with the beneficiary through an SMS or QR code. This will enable its use in rural and remote areas as well where internet connectivity can be a challenge. Since it is in the form of an SMS, it can be used by people who do not have a smart phone,” said Rajesh Mirjankar, Managing Director and CEO, Infrasoft Technologies.

It will also ensure targeted delivery of funds and help measure the social impact of subsidies, he added.

Infrasoft Technologies is working with two of the 11 banks offering e-RUPI and is set to work with two more banks in the coming days.

“It will give a new dimension to digital transactions and as it can be redeemed without a card or internet banking access at the service provider. The best part of the new payment medium is it can be controlled. The issuer can ensure that the money is being spent for the allocated purpose and can track the redemption of the voucher,” said Mandar Agashe, Founder and MD, Sarvatra Technologies.

Corporates and banks have also expressed an interest in using e-RUPI vouchers for their own products and offerings, for which discussions are understood to have been initiated with the National Payments Corporation of India.

Prime Minister Narendra Modi launched e-RUPI, a person and purpose specific digital payment solution, on August 2. A one time payment mechanism, users will be able to redeem the voucher without a card, digital payments app or internet banking access, at merchants accepting e-RUPI.

At present, 11 banks are live with this solution along with over 1,600 hospitals. More banks are expected to go live soon.

It can currently be used for schemes related to the health ministry, but more direct benefit transfer schemes are expected to be included in coming months.

How Modi govt plans to confront Amazon, Walmart’s Flipkart with ‘UPI’ of e-commerce

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India’s plan to develop Open Network for Digital Commerce (ONDC) is not good news for already knackered global e-commerce giants Amazon, Walmart’s Flipkart. The e-tailers have their plates full with a range of problems including an ongoing antitrust probe, a proposed prohibition on flash sales, and perennial opposition from various traders’ bodies.

Amazon and Flipkart’s ambitions to dominate India’s $800 billion retail market will soon face a reality check as India’s commerce ministry looks to ’end monopolistic practices’ in digital commerce.

What is Open Network for Digital Commerce (ONDC)

ONDC spearheaded by the commerce ministry is an initiative aimed to promote open networks for all aspects of the exchange of goods and services over digital or electronic networks. ONDC is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.

Govt claims that ‘as UPI is to the digital payment domain, ONDC is to e-commerce in India.’ The initiative is aimed to democratise digital commerce and move it from platform-centric model to an open-network model. Union Commerce and Industry Minister Piyush Goyal says that ONDC will work both for products and services.

How will ONDC work

ONDC goes beyond the current platform-centric digital commerce model where the buyer and seller have to use the same platform or application to be digitally visible and do a business transaction.

“The foundations of ONDC are to be open protocols for all aspects in the entire chain of activities in exchange of goods and services, similar to hypertext transfer protocol for information exchange over internet, simple mail transfer protocol for exchange of emails and unified payments interface for payments,” the ministry said.

“These open protocols would be used for establishing public digital infrastructure in the form of open registries and open network gateways to enable the exchange of information between providers and consumers. Providers and consumers would be able to use any compatible application of their choice for the exchange of information and carrying out transactions over ONDC.”

Single network like UPI

A 9-member advisory council is advising the Government of India on measures needed to design and accelerate the adoption of Open Network for Digital Commerce (ONDC). The advisory council is mandated to help digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers.

The advisory council includes R.S. Sharma, CEO, National Health Authority, Nandan M. Nilekani, non-executive Chairman of Infosys, Adil Zainulbhai, Chairman, Quality Council of India, Anjali Bansal, Founder & Chairperson, Avaana Capital, Arvind Gupta, Co-founder & Head, Digital India Foundation, Dilip Asbe, MD & CEO, NPCI, Suresh Sethi, MD & CEO, NSDL e-Governance Infrastructure Ltd, Praveen Khandelwal, Secretary-General, Confederation of All India Traders and Kumar Rajagopalan, CEO, Retailer Association of India.

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