How will prepaid e-RUPI vouchers affect FS in India?

By Puja Sharma

The National Payments Corporation of India launched a prepaid digital voucher called e-RUPI in August 2021. The single-use voucher has a cap of Rs 10,000 and has been available since its inception. Generally, e-vouchers are used to benefit people in remote areas who are not too tech-savvy.

As the RBI proposed to increase the cap of e-RUPI vouchers from the current Rs 10,000 to Rs 1 lakh per voucher and allowed the use of e-RUPI vouchers multiple times until the amount of the voucher is completely redeemed.

 “e-RUPI is a great innovation on the UPI platform. It can be seamlessly availed even in the absence of a bank account, smartphone, or internet connectivity and therefore is an excellent instrument to drive financial inclusion at the last mile. e-RUPI was launched last year on a pilot basis primarily for Covid-19 vaccination purposes,” Mandar Agashe, MD, Founder & Vice-Chairman of Sarvatra Technologies, said.

Now that it has witnessed success for Covid-19 vaccination use-case, RBI has increased the cap from 10k to 1 lakh and has also converted it into a multi-use payment voucher, thereby extending its utility across a wide range of new use-cases that will emerge over time.

“e-RUPI is an excellent initiative whereby a host of services including welfare services can be extended directly to the beneficiaries on their mobile in the form of an e-voucher powered by UPI. Thus, a contactless and cashless prepaid digital payment system will go a long way in bringing people without a bank account, a smartphone, and internet connectivity to UPI.” Agashe added.

Additionally, this will also interest the private sector and MSMEs to deliver employee benefits besides exploring a wide range of B2B transactions. Also, the new payment medium can be controlled, and therefore, despite raising the cap or using it more than once, the issuer can ensure the amount is spent for the allocated purpose and can track the redemption. The proposal would expand the usage of digital payments, especially to India’s most remote locations, propelling the country closer to its long-held goal of being a cashless economy.

Euronet Worldwide on the e-Rupi announcement of RBI during today monetary policy. Euronet Worldwide is a global and industry-leading payments and financial technology solutions provider.

Built on UPI rails, e – Rupi removes friction, works in an offline mode, and enables the large population of people receiving DBT to grow their digital payments footprint. This step of raising the e- Rupi limits to 1 lakh would accelerate DBT dissemination by the Government and allow accrual, ultimately resulting in improved welfare of the underprivileged section of the economy. We have built this capability on our UPI platform and the same can be leveraged by our banking partners” said Pranay Jhaveri, MD, India, South Asia, Euronet Worldwide. 

The RBI’s decision could be a welcome move and democratize digital payments with a deeper penetration in the smaller regions of India. Unlike other digital payment modes, beneficiaries need not have a bank account for e-RUPI services and hence RBI’s proposal will further provide enhanced flexibility, transparency, and ease to customers while allowing them to use a single voucher multiple times.

Ankit Bhatnagar, Head of Product at Mswipe, said: “RBI’s decision of increasing the cap one-RUPI vouchers to Rs. 1 lakh from Rs.10,000 will further democratize digital payments and will help increase digital payment acceptance in Tier-II and 6 in 2022.  At Mswipe, we believe that the increase in the cap one-RUPI will see a rise in e-RUPI transactions across its 5.25 lakh terminal and 1 million QR merchants. Besides, increasing NACH Mandate Limit for TReDS Settlements from INR 1 crore at present to INR 3 crore is a welcome move. This will pave the way to help bridge the current MSME credit gap, reduce processing time and ease the financing needs of MSMEs.”