Recently, the Prime Minister launched the e-RUPI. e-RUPI is a digital prepaid, purpose and person-specific payment utility system. The interesting bit is that the beneficiaries or the ones who are entitled to such sums which are ascribed to these prepaid instruments, will receive an SMS or QR code on their feature phones or smartphones and they can use them at the centers which accept such instruments for redemption. This e-RUPI system is built on the UPI platform and is aimed at facilitating cashless transactions across sectors.
At the point of presence, the verification code must be shared with the service provider who then authenticates and authorizes the transaction, enabling a contactless, real-time payment, concluding a settlement of funds with the service provider. Presently, there are fourteen banks which are subscribed to this platform and have integrated this into their systems.
The launch is with dedicated focus on the healthcare sector. Especially with the Covid-19 specific restrictions, the utilization of the e-RUPI at vaccination centers enables contactless payment, and also provides visibility over the redemption by the end user, who is originally intended to be the recipient of such benefits. For instance, where an employer wishes to have their employees vaccinated, it will be possible for them to issue such prepaid instruments and also have visibility over the point of redemption, once the service is complete. The process enables the issuer to be able to track the redemption of the voucher.
The unique feature of e-RUPI being purpose and person specific allows it to be adopted into several welfare schemes of the government. This will void any leaks in the system, and unlike cash, will ensure that there is guarantee of cash transfer to and for the intended beneficiary. This could support the intentions of the welfare scheme in furthering transparency amongst the manner in which the government allocations/ spendings are made, increase the efficiency of the delivery of services which are sought to be made under a particular scheme.
As the redemption procedure does not require the beneficiary to be connected to the internet, or present a card, or have a pre-installed digital payments app or access to internet banking, it is seamless. There is no trail created with respect to the data of the beneficiary, and the details of the beneficiaries remain completely confidential. Implementation of data privacy measures would be simpler with increased adoption of the system within the entire set up.
Much like the specific communication details are linked to an Aadhaar card holder, this process could also enable targeted delivery of consumer welfare schemes right to the final beneficiary. To increase the outreach of the programs, and to be able to serve the underserved, the e-RUPI system does not require the consumer to have either a digital or a bank presence, and saves the consumer from reliance on external facilities to be able to access the services which are allocated to them.
In view of what has been proposed under the scheme, there are several sectors which could benefit heavily from this system, especially, the sectors like education, healthcare, social welfare and the likes. In a social welfare economy like ours, having a payment system which is as good as a bearer cheque, will increase penetration of entitlement benefits to the last mile, and may be integrated into other schemes assisting the private and the public sector, alike.
(By Abhishek Malhotra, Managing Partner, TMT Law Practice)