Technology for MSMEs: e-RUPI — a one-time cashless and contactless payment mechanism — launched by Prime Minister Narendra Modi to strengthen the Direct Benefit Transfer (DBT) scheme has the prospective to increase digital transactions amongst micro, compact, and medium enterprises (MSMEs) as properly, according to authorities TheSpuzz spoke with. e-RUPI, which has been launched to allow “person and purpose-specific” transfer of funds below DBT schemes of the Ministry of Health, to commence with, will basically support the government or an organisation with quantity transfer to the beneficiary’s mobile phone (like feature phones) by way of a QR code or an SMS for only a unique objective, for instance, vaccination of personnel, alternatively of his/her bank account. Merchants would be in a position to accept the code or SMS with out any app or card intervention or even web banking by way of e-RUPI created by the National Payments Corporation of India (NPCI).
Use situations for e-RUPI would expand to other DBT schemes ahead, as informed by PM Modi in the course of its launch on Tuesday. This may well permit MSMEs as properly to send funds to beneficiaries like personnel and non-personnel to make certain it is applied for the necessary objective, for instance, talent development courses and social welfare measures as properly.
“Cashless and contactless transactions will definitely help MSMEs. This is a powerful way of increasing the e-relevance for MSMEs. By making cashless payments locally and nationally, e-RUPI will be a symbol of progress to reduce payment friction. The task ahead is to make this segment aware of the possibilities of this very timely approach, especially after Covid,” Shashank Tripathi, Partner, PwC India told TheSpuzz Online.
The initiative is also aimed at guaranteeing that funds reaches the intended beneficiary. According to the government, there are 314 DBT schemes from 54 ministries, as per the information from the DBTBharat portal. In FY21, more than Rs 5.52 lakh crore was transferred across 603 crore transactions. In FY22 so far, Rs 1.28 crore has been transferred across 155 crore transactions.
“As e-RUPI does not require the beneficiary to have a bank account, a major distinguishing feature as compared to other digital payment forms, it will see higher adoption rate in rural and distant areas effectively that are currently a hub of small businesses. The government is depending on the e-RUPI platform to deliver welfare schemes for which MSME and small businesses are a major part,” Shams Tabrej, Founder, and CEO Ezeepay told TheSpuzz Online.
e-RUPI has a considerable prospective to help compact organizations in taking direct advantage from a multitude of governments schemes as properly. “For Example, under the Make in India initiative, financial assistance to MSMEs in ZED Certification (Zero Defect and Zero Effect practices) is being offered that can be passed on to them using this platform. Future applications are also huge. The digital voucher can potentially be utilized to manage the working capital gap of the MSMEs such as enabling them to make GST or Provident Fund or Employee State Insurance payments utilizing e-RUPI and hence, shortening the working capital cycle significantly,” Gaurav Anand, CEO & Co-Founder of B2B loan marketplace Namaste Credit told TheSpuzz Online.
Quicker receipt of monetary subsidies and rewards below several schemes “will result in improved working capital management & better financial liquidity for the small enterprises. Depending on the facilities being made available over a period through the platform, small and micro enterprises, self-help groups, and small entrepreneurs will immensely benefit,” Kiran Chonkar, Partner – Resolution Advisory, BDO India told TheSpuzz Online.
Apart from rapid-tracking digital payments, e-RUPI will also accelerate direct advantage disbursals at the last mile and support bring the unbanked and underbanked into the monetary inclusion fold. “This is the true test of the network that has been created at the last mile because, at PayNearby, our merchants will be able to identify the user for the right benefit and deliver it in a specific manner. Targeted, transparent, and leakage-free delivery to the endpoint is the intention of policymakers, and we are happy that PayNearby will be able to enable this objective. It is designed to make digital payments simple, quick, and effective, and can be adopted by millions of MSMEs, who in turn, can handhold a tech-shy population towards a less-cash economy,” Anand Kumar Bajaj, Founder, MD & CEO, PayNearby told TheSpuzz Online.
PayNearby app enables retailers to give digital monetary services like Aadhaar ATM, BharatQR, bus booking, Fastag, insurance coverage, money collection, mobile & DTH recharge, bill payments, and so forth., to prospects at their shops. Under e-RUPI, the issuer can track voucher redemption as properly. Currently, there are 11 banks like HDFC Bank, ICICI Bank, Axis Bank, Bank of Baroda, SBI, Kotak Mahindra Bank, Indian Bank, and so forth., live on the platform.