Last Updated on August 4, 2021
August and October are the months of festivals. And when there are festivals, how can we forget about gifts? After all, the best gifts come from the heart. This festive season, the government decided to give us a better way to gift others: E-Rupi. It is a method to issue prepaid UPI vouchers.
Want to know more about this magnificent innovation? Here you go.
Table of Contents
- What is E-Rupi?
- How does E-Rupi Work?
- Why Should You Use it?
- Things to Keep in Mind
- Banks live with E-Rupi
- Final Thoughts
What is E-Rupi?
Developed by NPCI, E-Rupi is a single-use prepaid UPI voucher. It means that you can redeem the voucher without a card, digital payments app, or internet banking. It supports only limited services as of now. But there won’t be much time when you will be able to use it for other services, just like UPI. All of it depends on the success of this digital innovation.
How does E-Rupi Work?
Let’s leave the technical part for later. In simple words, E-Rupi is like a gift voucher. But you require a medium like a card, mobile app, or internet banking to redeem the gift voucher.
But that is not the case with E-Rupi. You can redeem the UPI prepaid voucher without any of the above mediums. It is so because the bank issues the voucher through SMS or a QR code. So, you can redeem the vouchers even if you don’t have an internet connection.
The UPI prepaid voucher can be issued either Person-to-Person (P2P) or Business-to-Consumer (B2C). Following parties play a vital role:
- Issuer Bank: It is the bank that initiates the request to generate UPI Prepaid Voucher on UPI. As of now, there are 11 issuing banks from where you can avail the facility of E-Rupi.
- Sponsor: It is the party who requests the bank to generate the UPI prepaid voucher. It can be a Corporate, Government Department, or business customer of the bank.
- Prepaid Voucher (PV) Beneficiary: As the name suggests, he is the beneficiary who will receive the prepaid voucher. A person can redeem the vouchers even if he doesn’t use UPI or have bank accounts.
- Designated Merchant: These are specific merchants where the PV beneficiary can redeem the voucher.
- Acquiring Bank: They provide a facility to designated merchants to accept the UPI Prepaid Voucher for redemption.
You will be surprised to know that the leading digital payments apps like Paytm, Google Pay, or PhonePe do not provide this facility yet. But India’s flying unicorns BharatPe and Pine Labs are on the list of acquiring entities. They proved that Indians are second to none!
Why Should You Use it?
Be it sponsors, beneficiaries, or corporates: Everybody benefits from this innovation. Here are the benefits E-Rupi has for different parties:
Benefits to Corporates
- They can enable the well-being of their employees by offering vouchers for healthcare and employee welfare activities.
- The transaction cost is reduced significantly due to cashless and contactless payments.
- The issuing companies can even track the redemption of vouchers to ensure that the employees use them appropriately.
- E-Rupi is end-to-end encrypted. So, there is a leak-proof delivery of the voucher. Hence, it is a safe way to distribute a voucher.
Benefits to Sponsors
- There is no intermediary involved. So, issuing a voucher is pocket-friendly.
- As it is non-transferable, it ensures that only the beneficiary can redeem the voucher.
- There is no compromise on the security of the voucher, as you have to authorize it via a verification code.
- The issuing process is contactless and hassle-free. You can issue it from the comfort of your home.
Benefits to Beneficiaries
- You can redeem the voucher even without the internet.
- The redemption process is no rocket science. 2 steps: that’s all it takes to redeem a voucher.
- It ensures that payment gets credited to the service provider after completion of the transaction only. So, the service provider can’t deceive you by collecting payment in advance.
- As it is prepaid, it ensures timely payment to the service provider. And that too without any involvement of a third party.
- It also protects your privacy as personal details are not shared while redeeming the voucher.
Things to Keep in Mind
E-Rupi has tonnes of benefits for all parties. But it doesn’t mean that you can issue or redeem it as per your wish. There are some things you should keep in mind while issuing or redeeming a UPI Prepaid Voucher.
- Only a KYC-compliant account holder can request the banks to generate the voucher. If you want to give one of them to your well-wishers, don’t forget to fulfill the KYC requirements with your bank.
- The maximum limit of each voucher is up to Rs 10k! So, you will have to create multiple vouchers if you want to transfer a higher amount.
- The UPI Prepaid Voucher is non-transferable. So, reconsider twice before giving it to a person.
- The voucher is single-use. So, you can’t reuse it again and again. In case of a duplicate request, the issuing bank may block the voucher.
- You can redeem the voucher only for specified goods and services having the valid Merchant Category Code (MCC). You may find the list in the Terms and Conditions of the issuing bank. So, make sure to read it carefully before redeeming it.
- A person can’t use the voucher to withdraw cash or avail of cashback. You can use it to purchase goods and services only.
Banks Live with E-Rupi
E-Rupi is the latest innovation. So, it is not very popular yet. That is why only 11 banks can issue a UPI Prepaid Voucher at the moment. It includes the following banks:
- Axis Bank
- State Bank of India
- Punjab National Bank
- HDFC Bank
- Bank of Baroda
- Canara Bank
- ICICI Bank
- IndusInd Bank
- Indian Bank
- Kotak Bank
- Union Bank of India
What’s more, BharatPe and Pine Labs are the first external acquirers. For the rest, the banks themselves provide the facility for accepting the vouchers.
Gift vouchers were no less than a wonder themselves. But E-Rupi takes the gifting tradition to the next level. By issuing UPI Prepaid Vouchers, you can take care of your well-wishers. Due to its numerous benefits, it has the edge over other methods. It has the potential to become the future of this sector.
But don’t forget to keep the above things in mind while issuing or redeeming the voucher. Else, it may do more harm than good for you.