e-RUPI 101: Everything You Need to Know About This Latest RBI Offering


A few months ago, the Reserve Bank of India said that it is working on a phased introduction of its own digital currency.

Digital currency (digital money, electronic money, or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored, or exchanged on digital computer systems, especially over the internet. Types of digital currencies include cryptocurrency, virtual currency, and central bank digital currency.

What is digital money issued by a central bank?

CBDC (Central Bank Digital Currency) is similar to currency issued by a central bank. However, it is not printed on paper (or polymer). It is a sovereign currency in electronic form. It would appear on a central bank’s balance sheet as a liability (currency in circulation).

A CBDC’s underlying technology, shape, and application can be tailored to meet individual needs. CBDCs should be able to be exchanged for cash.

CBDC’s introduction can deliver significant benefits, such as less reliance on cash, increased seigniorage due to lower transaction costs, and reduced settlement risk. CBDC could lead to a more reliable, efficient, trustworthy, regulated, and legal tender-based payment solution.

To be sure, there are hazards involved, but they must be carefully weighed against the potential advantages. According to an RBI statement, “as we go forward in the direction of India’s CBDC, it will be RBI’s endeavor to take the required steps to reassert India’s leadership position in payment systems.”

CBDCs are expected to be a part of any central bank’s armory in the future. According to the central bank statement, setting this up will necessitate careful calibration and a nuanced approach to execution.

What distinguishes the RBI’s digital currency from the others?

The digital currency of the Reserve Bank of India (RBI) is a digital form of legal money issued by a central bank. It functions similarly to fiat money and can be exchanged for fiat money in a one-to-one ratio. Its only difference is in its appearance.

Other cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin, on the other hand, are not regarded as legal tender. In truth, private cryptocurrencies come with many dangers, and the price volatility makes them a risky alternative for investors.

The Indian government has repeatedly said that cryptocurrencies are discouraged in the country.

What exactly is e-RUPI?

Prime Minister Narendra Modi introduced e-RUPI, a cashless and contactless digital payment option for individuals and businesses as the first step towards implementing CBDC, in August 2021.

The e-RUPI voucher is set to play a significant part in making DBT more effective in digital transactions in the country and giving digital governance a new dimension.

It will benefit everyone in terms of delivering targeted, transparent, and leakage-free services. The prime minister stated that e-RUPI symbolizes how India is advancing by integrating technology into people’s lives.

“A government or a company can issue e-RUPI to its employees for targeted use because it only allows purchases from merchant outlets and does not allow direct cash-out or peer-to-peer transfer,” said Mihir Gandhi, Partner, and Leader – Payments Transformation, PwC India.

It is a QR code or SMS string-based e-voucher that is sent to the beneficiaries’ mobile phones. Users of this seamless one-time payment mechanism will be able to redeem the voucher at the service provider without using a card, digital payments app, or internet banking access.

It was created by India’s National Payments Corporation in partnership with the Ministry of Finance, Health, and the National Health Authority.

How can e-RUPI vouchers be used?

These vouchers are similar to e-gift cards and are prepaid in nature. The cards’ codes can be exchanged via SMS or via a QR code.

These e-vouchers will be tailored to each individual and their intended use. They can be used by anyone who does not have a bank account, a digital payment app, or a smartphone.

Apart from uses for corporates, the e-RUPI has other primary uses and benefits including:

  1. Benefits for Hospitals – The e-RUPI is extremely easy and secure. The voucher is authorized via a verification code shared by the beneficiary. It ensures a hassle-free and contactless payment collection as it does not involve handling cash or cards and can be redeemed in a few steps. It also has a lesser decline due to its pre-blocked amount.
  2. Benefits for End-users – The e-RUPI is a contactless voucher; this ensures that the beneficiary does not need to carry a printout. Its safety, security, and easy redemption process also allow beneficiaries to keep their personal details, hence maintaining their privacy. The end-user only needs a mobile phone and an e-voucher to redeem it. They need not have a digital payment app or a bank account.

What are the applications for e-RUPI vouchers?

These vouchers will primarily be used for medical expenses. These vouchers can also be transferred to employees by their companies.

The launch of e-RUPI has also given a new opportunity to utilize the digital payment platform for administering the Covid-19 vaccine to intended beneficiaries in a transparent and effective manner.

Businesses can take advantage of these digital vouchers for Covid-19 vaccination under CSR to persons other than their employees and families.

Paytm Payouts & e-RUPI – Digitizing the corporate way hand-in-hand

It was a proud privilege for us to observe how closely a totally government-backed product resembled one of ours.

Paytm Payouts’ many sub wallets, such as the Food and the Fuel wallets, are also semi-closed-loop vouchers, similar to e-RUPI vouchers. Just like e-RUPI, they are also designed for specific usages like food payments or paying for fuel.

Our wallets are also widely accepted across the country. They have a mechanism that allows the clients to personalize their transfer and usage limits.

At Paytm, we have a large merchant base. Our wallets operate through a robust dashboard that makes them highly convenient for businesses to use. This dashboard also sends out regular reminders, notifications, and updates on any new or removed features.

Any discount you provide using a tangible voucher will include the costs of:

  • Printing.
  • Purchasing.
  • Logistically distributing the vouchers to customers

Paytm Payouts’ sub-wallets like the e-RUPI are potentially robust and convenient financial tools. This is due to the fact that both of these products are hosted on mobile devices and are available wherever their owners are.

As a result, they are highly leak-proof because of the non-transferability, as well as digitally convenient, handy, and quickly redeemable.

With Paytm Payouts, you also have the access to a slew of other benefits that businesses will appreciate, including:

  • Employee tax benefits – Help your employees save heavy tax on their salary through the Paytm Food Wallet/Paytm Gift Wallets/ Paytm Fuel Wallets, and more.
  • Business expenses – Manage recurring or one-time business expenses like IT costs, rents, salaries, reimbursements, and more efficiently using Paytm Payouts.
  • Payout links – Send money to your customers even if you do not know their bank account or UPI details by sending an easy-to-pay link.
  • Comprehensive report generation – Paytm Payouts also instantly generates comprehensive reports for your business for reconciliation purposes.

Obstacles to e-RUPI’s implementation

The use of cash in India is a significant consideration. The Reserve Bank of India (RBI) is in charge of printing, circulating, and transacting cash in India.

Despite demonetization in 2016 and the introduction of GST in 2017, the use of cash in circulation has increased at a compounded annual growth rate (CAGR) of 10.2 percent between 2018 and 2019. (RBI circular 2019).

This is reflected in India’s GDP, which is why the government continues to manufacture cash. This means that in India, cash is still the favored method of payment. Switzerland and Japan are two more countries that suffer similar problems.

With the e-RUPI’s implementation, additional tasks for the already overburdened RBI include:

  • Developing and administering the CBDC system
  • Customer onboarding
  • Due diligence
  • Transaction authorization
  • System security
  • Ensuring interoperability with other systems
  • Executing partnerships with third parties
  • Designing and implementing a CBDC regulatory framework

The RBI also needs to implement monitoring, oversight, and risk management activities, assess third-party risks, and set up procedures to respond to any CBDC interruptions caused by operational failures or cyber-attacks.

Costs, risks, accountability, and the extent of the bank’s operational control are all factors to consider while counting out the obstacles to its efficient implementation.

List of banks that have implemented e-RUPI

  • State Bank of India
  • HDFC Bank
  • Axis Bank
  • Punjab National Bank
  • Bank of Baroda
  • Canara Bank
  • IndusInd Bank
  • ICICI Bank


With the introduction of the e-RUPI, and based on what we’ve learned so far, one thing is clear: the e-RUPI is here to stay.

MNCs can not only utilize this strategy to give employee benefits but also use it as part of their CSR funding, according to the government.

How efficient is it? – Well, since it was released last month, we’ll have to wait and see.

Unified Payments Interface (UPI) is a banking industry-sponsored protocol that allows people to link their bank accounts with their phone numbers through apps provided by payments service providers and to make instant fund transfers between bank accounts.

In 2019, the Unified Payments Interface (UPI) conducted about 11 billion transactions, making India a rare big market where consumers are increasingly using account-to-account transfers to send money to other persons and pay for products and services, according to the World Bank. Because UPI payments are growing at a monthly rate of $31 billion in February, the total annualised value of UPI payments is expected to reach more than $373 billion in 2020. (Source)

UPI is well-suited for payments in stores and on the internet, as it supports both push and pull transactions and allows for payments to be made instantaneously and around the clock. It supports a wide range of use cases, including the ability to view a user’s bank account balance, and it communicates with various payment systems through its open API. A centralized payment system has been developed by the National Payments Corporation of India, which operates the UPI network and puts billers of all types and payment aggregators under its roof. Payment applications such as Paytm enable their consumers to access and pay their telecom, gas, electricity, and insurance bills by collaborating with licensed firms that provide access to the Bharat Bill Payment System platform.

E-RUPI voucher transfers are also based on the UPI mode of payment, so we can envision a similar success trend for them as has happened with UPI across the country since its inception.

In rural India, the lack of access to the internet or a 3G signal was a severe disadvantage. Because this new payment mechanism is based on SMS, internet access should not really be an issue.

With how successful our Payouts sub-wallet offerings have gotten, we can only expect a profitable consequence from the e-RUPI as well.

By the way, were you impressed by our unique wallet offerings? Click here to make them yours now!

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