Right now, India’s entire payment process is mostly digitalized, and the national currency (Rupee) too has received its digital equivalent named digital rupee or eRupee or e₹. It is also spelled as eRupi to show e₹UPI. Since RBI issues it, eRupees are the centralized currency. These also work within the traditional financial systems.

Let’s find out some more details of it:

What Is An eRupee?

eRupee is the Central Bank Digital Currency (CBDC) issued by the Reserve Bank of India (RBI). It is nothing but a digital version of the physical currency and it is exchangeable too. Moving on to the value, 1 eRupee is equal to 1 physical rupee.

It is a medium for no-contact ePayment to send to the beneficiary’s mobile number even though it is just a featured phone. Yes, to use eRupees, the beneficiaries do not need any Android or iOS device, yet they can use it because it is available in the form of a voucher (SMS string or a QR code). And beneficiaries can redeem the eRupee anywhere - in any store or merchant that accepts these vouchers without any card, app, or net-banking.

e₹ is a digital tender that RBI issued electronically and an eRupees are available in the exact same dominations as the Indian currencies (both as notes and coins). Users can access the eRupees from digital wallets and UPI apps to transact with any person or business. It is legal and can be used for all types of transactions. Not just that, it follows bank policies, hence, it is a trustworthy method of payment.

Purpose

The key purpose of an eRupee is to encourage more digital payments in the coming days without any dependencies, on cards or any app. The central bank opines that network dependency has to go away to bring more people under the umbrella of digital payments and with eRupees it will be possible.

RBI has also mentioned another reason behind introducing eRupees which is to cut down the cost of printing and transporting paper currencies.

How To Purchase An e₹ Or How To Load eRupee In eWallet?

To transact with digital currency, users have to purchase it, or in more specific words, users need to load eRupees in eWallets to use it further. Launched as a pilot program, RBI previously allowed only 8 selected banks to offer this digital currency in specific states that too within a closed user group (CUG); however, more banks are into it now. To purchase, the users first need to:

• 1. Visit the official website or install the eRupee app of a participating bank
• 2. Register for CDBC eRupee wallet by creating a PIN for the wallet
• 3. Validate the eWallet
• 4. Wait for the notification from the bank

The concerned bank will notify the buyer about the approval or rejection of the registration request. Check out the list of participating banks

Once the request gets approval from the bank, users can load money in the eWallet from that bank account or through UPI. This wallet is as same as a physical wallet, so the user can transact with it anytime needed.

How To Redeem e₹?

A beneficiary (after receiving an e₹) or an eRupee buyer needs to provide the eRupee QR or the SMS string to the payee and share the verification code to redeem it.

Usage of eRupee

e₹ can be used in the same way paper currencies are used. Users can pay any merchant using the eRupee just by scanning any payment QR. Customers who purchase the eRupees can spend it for both P2P and P2M transactions.

Who Can Use e₹?

Anyone can use eRupee - after purchasing, one can use it for personal and business payments. For eRupee payments, a beneficiary does not necessarily need a bank account or UPI. The beneficiary will only receive a voucher which he/she can redeem later.

How Does eRupee Benefit The Users?

The benefits of eRupee include:

• 1. Hassle-free and zero-cost issuance, hence, a great saving for the government
• 2. Fast, and safe no-contact payment that ensures more digital payments
• 3. Cashless payment collection, so merchants can target people who are not using UPI or other online payment modes
• 4. Easy redeeming
• 5. Low transaction cost as there is no intermediatory
• Assists the government in providing subsidies for different schemes

UPI and eRupee: A Thin Line of Difference

For UPI, a beneficiary needs an active bank account linked with the number, whereas e₹ does not make it mandatory. Similarly, UPI users must have a mobile app and sufficient data – both are not necessary in the case of eRupee transactions.

And the biggest difference is eRupee itself is a currency whereas UPI is a mode of online payment. By integrating a payment gateway, one can unlock payment collection through different modes like UPI, Cards, Wallets, and Net-Banking; however, eRupee is not a mode of payment.

The Future of eRupee

eRupee holds all the possibilities of wider acceptance just like UPI once more banks start to participate in it. As soon as more cities and more banks come under it, the usage of eRupee will speed up. Hence, RBI will successfully achieve its goal of tapping the population which is yet to use digital payments. Since RBI regulates it, it does not include safety concerns like cryptocurrency. Therefore, more people will choose to be a part of it. As per a report, Google Pay, PhonePe, and many others have expressed their interest in eRupee transfers through UPI which will bring even wider acceptance of eRupee.

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