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What is e-RUPI? How does it work?


By Janavi Lakhani

According to a World Bank report, around a hundred and ninety million adults do not have a bank account in India. As of August 2020, only fifty-eight million credit cards were being used in India. Considering the figures of 2019, there are approximately a hundred and thirty-seven crore people in India. This means that only 4.23% of the Indian population actively uses credit cards. India has a long way to go to achieve complete financial literacy.

Though 2021 has witnessed several Fintech reforms, the Government has yet another innovative mechanism to make Indians financially active. The initiative is meant to bridge the financial gap that India has today and to enable the less fortunate to have equal access to healthcare and finance care. This will not only lessen the financial gap but will also get people together; mold us into a nationwide community.


Let’s understand what e-RUPI is

E-RUPI is a voucher in an electronic form. It is not a digital payment gateway. It is a prepaid card (the Government makes the payment) that will help subsidies seamlessly reach the not-so-privileged. As these vouchers are issued by the Government directly, the Government has complete control over when to issue them, whom to issue them to, and in what quantity.

These vouchers work like an entry ticket. This means that when they are issued for meeting a particular expenditure, they can be used only for that purpose and nothing else. Moreover, they can be used only by the person to whom they are issued; they cannot be endorsed or transferred. This way, the Government has created a safe and secure mechanism to ensure that the money is utilized only for intended purposes and not for any malicious activity.

How does it work?

The cashless payment solution has been developed by the National Payments Corporation of India, with the support of DFS and NHA. The e-payment voucher would be sent to the beneficiaries both via SMS and QR Code. This ensures that those who don’t own high-end intelligent phones receive and utilize the payment vouchers. The users do not need to own a card or access a digital payment app or have internet banking on their phones to redeem the voucher. As the amount is already pre-stored in the card, the transaction gets executed quickly. While redeeming the voucher, the user would not be required to disclose his identification details. Only the SMS or the QR code would be required to be shown to get the task completed.

What are the benefits of using e-RUPI?

Using this technology, Corporates would also be to distribute e-RUPI vouchers to their employees. As the transfer of this e-card is entirely online, the costs associated with it are comparatively less. The beneficiary need not worry about carrying a physical copy of the voucher at the merchant’s place as everything can be done on the user’s phone. The amount is already loaded onto the voucher, hence the beneficiary can quickly redeem the amount without stressing over payment failures or rejections.

Currently, the banks that are live with e-RUPI are SBI, HDFC Bank, Axis Bank, PNB, BOB, Canara Bank, IndusInd Bank, and ICICI Bank. This could be India’s first step towards digitizing currency. At the rate with which finance is automating, we hope to see many more Government initiatives to make this industry adept.

(The article was first published on and is being reproduced here with permission.)