Blockchain in Business Management

e-RUPI Exercise

Submitted By:

Group 2

Mayank PGP/24/159
Meghana Mallipudi PGP/24/160
Sohail Chumber PGP/24/179
Bishesh Oram PGP/24/198
Parthapratim Saren PGP/24/401
Introduction
e-RUPI is a one-time contactless, cashless voucher-based payment method that allows
users to redeem the voucher without the need for a card, digital payments app, or internet
banking access. The voucher is received by the beneficiary on their phone in the form of
an SMS or a QR code. The voucher is prepaid and can be redeemed at any
center/institution which accepts it. The beneficiary need not have a bank account to use
e-RUPI. It can be used by people who don’t own smartphones and in places where there
is no internet connectivity.

The National Payments Corporation of India (NPCI) has partnered with 11 banks for e-
RUPI transactions (Axis Bank, Bank of Baroda, Canara Bank, HDFC Bank, ICICI Bank,
Indian Bank, IndusInd Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of
India and Union Bank of India).

Bharat Pe, PNB Merchant Pay, Pine Labs, and YoNo SBI Merchant Pay are among the
apps that allow you to make purchases. The capacity to conduct end-to-end digital
transactions without the requirement of a physical middleman, resulting in decreased
operational costs, is one of the primary messages of blockchain-based tokens as well as
eRUPI.

Mechanism:
e-RUPI coupons are electronic vouchers that will be sent to recipients in the form of a QR
code or text message and will allow them to receive cash straight into their bank account.
Through its partner banks, any government agency or corporation may create e-RUPI
vouchers, which they can subsequently distribute. To finalize the transaction, the
beneficiary must show a QR code or send an SMS message to the store, who will scan it
and provide a verification code to the beneficiary's phone number. In order for the
transaction to be successful, the latter will be required to share the code with the
merchant.
Step by step process to use e-RUPI:

➔ The issuer (let's assume the government, although it could be anyone) gives me a
6-month e-RUPI voucher.
➔ A government bank account is “blocked” with that much money (with a bank or
RBI)
➔ I get the e-RUPI coupon in the form of an SMS or a QR code via an app (or both)
➔ I go to an e-RUPI-accepting store or hospital.
➔ I show them my SMS/Quick Response Code. They scan it using a merchant app
or something like.
➔ I then receive an OTP on my phone.
➔ I read the OTP while wearing my glasses because, you know, old age.
➔ The money is sent from the government account to the merchant or hospital
account.

User doesn't see the money since it goes straight from the government to the business.
The money is sent to the merchant immediately once I provide them my OTP, thanks to
the excellent quick UPI network. The funds are essentially frozen in an account. As a
result, as long as funds remain frozen, the government cannot utilize them for any other
reason. (This is similar to how ASBA blocks funds for IPO applications - the monies do
not leave the account, but they stay blocked.)

Cryptocurrencies are not the same as eRUPI. It isn't built on the blockchain platform.
Cryptocurrency enthusiasts feel that eRUPI and blockchain share the same core premise:
eliminating middlemen so that benefits reach the end user without leakage.

Similarities between blockchain and e-RUPI

➔ Peer-to-peer money

➔ Immutable

How Blockchain may influence e-RUPI and its large-scale adoption

e-RUPI, like blockchain technology, emphasizes one of the fundamental themes of
blockchain-based tokens: the ability to conduct end-to-end digital transactions without the
need for a physical middleman, resulting in lower operational expenses. The goal of both
cryptocurrencies and e-RUPI is to reach out to the unbanked. However, the strategy is
different. Cryptocurrencies are a decentralized and distributed means of exchange,
whereas e-RUPI is a government-controlled system.

While the introduction of eRupi isn't the government's official endorsement for
cryptocurrencies, it is a step in the right direction towards digitization. It demonstrates that
the government is willing to accept electronic payments in the form of vouchers, which
has sparked excitement among blockchain aficionados. The adoption of e-RUPI will bring
information technology governance to a new level. Blockchain enthusiasts have greeted
it with enthusiasm, believing that crypto assets and steps to boost the digital ecosystem
can coexist. Market experts also feel that the voucher could assist India retain its
leadership position in digital payments. Furthermore, since no sensitive personal
information is required while redeeming coupons, it protects data confidentiality and
privacy in the same manner as blockchains do thus instilling a belief in the eRupi similar
to that of the blockchains.

Why is e-RUPI revolutionary?

★ Payments can be made using a QR code (for smartphone users) or an e-voucher
based on an SMS string (non-smartphone users). In the past, non-smartphone
users have struggled to accept digital payments. This allows individuals to
gradually adapt and embrace digital methods, which is good news for the future.
e-RUPI's objective and long-term vision is to reach and link 190 million unbanked
people in India, bringing them into the formal financial system and closing a portion
of the country's digital divide.

★ The instrument can be used for a certain purpose. It might, for example, be for
COVID vaccinations at government facilities. In this case, the beneficiary only
receives the benefit when they use the service.

★ It is conceivable that the particular services were not used and the money was
used for other purposes via the conventional direct-benefit transfer to a bank
account. If properly implemented and monitored, e-RUPI has the potential to have
substantial ramifications for digital adoption, transparency, and social activities.

Benefits of e-RUPI
★ Transparency of transactions - currency is an opaque instrument that leaves no
record. Transparency is promoted by all digital payment developments. To that
extent, e-RUPI should be considered as well.

★ Reduced cash usage, particularly when a financial institution is disbursing benefits.

If organizations utilize a portion of their kitty to give purpose specific e-RUPI – such
as learning allowance on certain portals – this may have substantial negative
consequences for firms.

★ Better last-mile delivery of social benefits is one of the most important areas —
whether it be education, nutrition, healthcare, or anything else.
 ★ Encourage a portion of the population that has remained digitally illiterate to use
digital payments.

While the government will work to incorporate e-RUPI voucher-based digital payment
solutions into its programmes to offer services to beneficiaries, it has also made the
platform available to the private sector. The government has welcomed private
companies to utilize the digital e-RUPI vouchers for their employee welfare programmes
and schemes as part of their corporate social responsibility (CSR) efforts.

e-RUPI is the payment instrument of the future, promising data security, targeted delivery,
digitalization, and financial inclusion.