Amit Nigam, COO & Executive Director, BANKIT

With 22+ years of rich experience, he has worked at top management in Telecom, FMCG and Fintech companies like Airtel, Aditya Birla group. He was one of the founding members of Spice Money. With a proven track record of turning Greenfield projects into a profit-making company and running the BANKIT business his leadership qualities.


India’s digital payments journey that started with the advent of PoS (Point of Sale) terminals in 2016 has been an eventful one. Post demonetization, the e-payments revolution gained immense traction, with Indian consumers moving to cashless modes of payments almost overnight. Over the next few years, several government-led initiatives such as the launch of UPI, IMPS, Bharat BillPay provided a major push to the adoption of digital payments in the country. Complimenting the efforts of the government policymakers, privately held banks, financial institutions and new-age FinTech companies have also been playing the role of a growth catalyst for this space. With a single vision of increasing digital payments penetration in India, the seamless collaboration between various stakeholders is what has made the country a digital payments blueprint. 

COVID-19 proved to be yet another infection point for the digital payments sector, as the lockdown restrictions and the mandated physical distancing highlighted the importance of contactless transactions amidst a raging pandemic. Against this background, Honourable Prime Minister Narendra Modi has introduced e-RUPI – the latest addition to its series of initiatives aimed at bolstering the digital payment infrastructure in India. The one-of-its-kind contactless and cashless payment solution is powered by the National Payments Corporation of India (NPCI), in collaboration with the Department of Financial Services, the Ministry of Health and Family Welfare, and the National Health Authority. Touted as a game-changer, the platform will be taking forward India’s vision of financial inclusion while making significant contributions to the growth of the FinTech and banking industry.

Including Bharat in the formal financial ecosystem

Available in the form of digital pre-paid vouchers, e-RUPI facilitates seamless payment and doesn’t require a physical card, digital payments app or internet banking. Payments can be made either by scanning the QR code (for smartphones) or through an SMS string (for feature phones). This will be the starting point for the widescale adoption of digital payments adoption across the hinterlands of India, where the majority of the population still do not have smartphones and are not yet comfortable with more advanced methods of internet banking, digital wallets, virtual credit/debit cards etc. More importantly, e-RUPI will enable greater access to financial, healthcare and welfare services to the underserved/unserved segments of the population.

Simplifying the DBT process for improved last-mile delivery of services

The e-RUPI voucher will strengthen the implementation of the DBT (Direct Benefit Transfer) scheme and bring better transparency into the allocation and distribution of funds sponsored by the government as well as corporates. This will further ensure faster and easier last-mile delivery of social welfare schemes to beneficiaries, as well as services under schemes aimed at providing drugs and nutritional support under Mother and Child welfare schemes, TB elimination programmes, drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, and fertiliser subsidies etc. The core idea behind the e-RUPI initiative is to completely eliminating the scope of pilferage across the supply chain. Besides adding more value to the intended beneficiaries, the person and purpose-specific payment solution will also augment the CSR activities of large and mid-size organizations.

With this payment mechanism in place, the government can eliminate intermediaries and extend the monetary, healthcare, scholarship, ration and other benefits directly to the beneficiaries. Since e-RUPI can be used as a purpose-specific substitute for banknotes and physical debit/credit cards for payments, it is also equipped to solve challenges such as biometric authentication fails and limited internet bandwidth.

Improving the ease of life of the underprivileged 

Despite the stellar progress India has in its quest to become a 100% digital economy, there remains a huge rural-urban gap in terms of digital adoption, overcoming which has been a challenge for service providers. As a result, a large section of India’s population has restricted access to quality education, healthcare or employment opportunities. The e-RUPI scheme aims to bridge this digital gap and extend the reach of its social welfare initiatives to the remotest corners of the country. As highlighted by the announcement made by the government, this will improve the ease of life of the underprivileged sections of society. However, the e-RUPI scheme will be most useful during and aftermath of natural calamities when prolonged power/internet outages disrupt the physical movement of cash.  

Moving towards a digital currency

Since the demonetization, the Government of India has undertaken multiple initiatives to promote the adoption of digital payments across the country. In 2020, just after the COVID-19 pandemic broke out, Narendra Modi urged Indians to replace cash with contactless payment to curb the spread of the virus. The last 18 months have certainly seen a massive uptick in the use of digital payment platforms, and the introduction of e-RUPI comes as the entire banking and payments sector is standing on the cusp of a digital transformation. 

As reports confirm, the government is working towards the development of a central bank digital currency (CBDC) as an alternative to physical currency. While cash may not become obsolete, at least not in the immediate future, e-RUPI launch is believed to the first step in paving the way for mass adoption of the RBI’s CBDC. Firstly, it will help in addressing the existing gaps in India’s underlying digital payments infrastructure and allow the government policymakers to bring certain changes that can lay the foundation for a smooth transition from cash to digital currencies. 

Just like the UPI, the e-RUPI, as a safe, robust and convenient payment mechanism, is poised to bring large-scale disruptions into the financial ecosystem in India. The pilot project of vaccination drive has already proven to be a success and industry experts agree that the launch of this cashless and contactless payment instrument may mark the beginning of another digital payment revolution – one that will narrow the gap between the haves and the have nots. 

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