An e-RUPI In Hand

Context: New digital pay option (eRupi) can make welfare schemes efficient, transparent.

Background

• Recently launched by the Prime Minister, e-RUPI is a digital prepaid, purpose- and person-specific payment utility. 
• It brings the ease and simplicity of UPI to the social security platform of Direct Benefit Transfer.

Potential benefits of e-Rupi

• Sharpen targeted welfare programmes: Being a one-to-many payments facilitator, it will help in targeting; the private sector will find it helpful to disburse non-cash benefits to employees and support focussed CSR programmes. Later, individuals could use it for gifting.
• Facilitating cashless services at COVID-vaccination Centres: Corporates and philanthropies can buy services in bulk to vaccinate employees and those in need. 
• The intended beneficiaries will receive an SMS or QR code on their feature/smartphone, redeemable for cashless vaccination at participating centres. 
• A single-source MIS gets created effortlessly at the back end.
• Easy to scale: Built on the UPI platform, e-RUPI is easy to scale by the issuer; it will be contactless, ensures real-time payment and executes online settlement of funds into the service provider’s bank account. 
• Making cash transfer possible: Cash transfers are usually despised as their utility to provide food security or generate livelihoods in minimal. 
• e-RUPI could break the policy logjam by making cash transfers purpose- and person-specific, freeing them from dependence on bank accounts and providing visibility from the time of issue until redemption.
• Making PDS more efficient: The inefficiency of the programme is rooted in high overhead costs, leakages, exclusion and inefficiencies.
•  A food-specific e-RUPI voucher will allow beneficiaries to buy rations from an outlet of their choice. 
• The value addition beyond the One Nation, One Ration Card will come from removing price distortion and the redemption of the voucher at market price by merchants within and outside the PDS network.
• Streamlining fertiliser subsidies: e-RUPI will enable farmers to buy fertiliser at nominal prices with direct credit of the subsidy amount into the account of the authorised dealers.
• Custom designed for school voucher programmes: Identified students will receive vouchers to pay school fees and expenses at institutions of their choice, public and private, which compete to get full fee-paying students.
• The resultant option and competition benefit students and schools while enhancing transparency and accountability.
• Providing basic income support: The lockdowns have exposed the poor to acute distress due to loss of means of livelihood. e-RUPI can mitigate their stress by rapidly distributing food and cash vouchers at scale.
• In healthcare: Beneficiaries of Ayushman Bharat will receive e-RUPI vouchers of designated value useful at hospitals, providing them portability and choice. The service provider will benefit from the immediate payment.
• Corporate applications of e-RUPI: Include scrupulous disbursement and easy compliance of providing employee benefits with tax implications such as meals, education, travel and health.

Conclusion

• Light regulation and the opening of e-RUPI to the competition will spur innovation and adoption. 
• All banks, small and big, NBFCs, non-bank PPI issuers, and telcos may be allowed to issue it later. 
• e-RUPI opens up a world of opportunities to the government, people, and businesses to provide, avail and pay for services seamlessly.