86. eRupee — Experience
Today is 29th Feb…
Earth takes 365.242 days to orbit the Sun. So once in 4 years we have one extra day added (in Feb month) to compensate for that 0.242 days.
And today is that extra day.
I thought let’s publish an article on this day as it will come again in 2028.
Although there are a lot of things happening in the payments world (new companies got PA licences, PayTM Payments Bank crisis, RBI suspended card based vendor payments, UPI launch in Sri Lanka, update to BBPS Master Circular, regulatory sandbox for FinTech and many other things) but I couldn’t find time to write about those.
So I am publishing an article that I wrote last year on a lazy Saturday evening when I played CBDC-CBDC with my friend Sparsh Jain.
In 2022, we got the new money — eRupee — our own Central Bank Digital Currency.
As the name indicates, CBDC is the central bank’s digital currency that is issued by the RBI via the banks… read the details in this article.
eRupee has the flavour of cash but it is yet different. eRupee is similar to a digital wallet in many ways and yet different in many ways.
Both (eRupee and Digital wallets) have the concept of a wallet where the balance amount (held in the wallet) doesn’t earn interest but a digital wallet works on homogenous amounts whereas eRupee works on tokens.
Meaning: In digital wallet, Rs.203 is just Rs.203 whereas in CBDC eRupee, Rs.203 is made of different denominations (e.g. Rs.200 note and two coins of Rs.1 and Rs.2)
Let’s say if you spend Rs.50 from each of the wallets
In a digital wallet, the balance is reduced by Rs.50 and the new balance will become Rs.153
Whereas in the eRupee wallet Rs.200 note is removed and new notes of Rs.100 and Rs.50 are introduced and still the balance (after spend) will be Rs.153
Fascinating… isn’t it?
I will write a detailed article on the workings of CBDCs. In this article, let’s go through the customer experience of eRupee
Note: I used ICICI bank’s App
Registration:
Note: Steps are similar to registration on any UPI App (why reinvent the wheel… isn’t it?)
Creation of Digital Rupee:
If you load Rs. 2 again, then your wallet balance will become Rs.7 and is made of two notes of Rs.5 and Rs.2.
Each of the digital currency notes as well as the coin will have a 15 digit unique serial number (just like our regular currency notes).
Note: Loading via UPI is not enabled for ICICI Bank App but it was available in IDFC’s App
Transfer — to Phone Number (P2P)
What happened?
I (remitter) had one note of Rs. 5 and transferred Rs. 2 to Sparsh (Beneficiary).
Beneficiary received one note of Rs.2
My wallet’s new balance is Rs. 3 which is made up of one note of Rs.2 and one coin of Rs.1
[Each of these new notes and coin will have unique serial numbers]
What happened to that Rs.5 note? — It was removed from the system (Even from bank’s ledgers) to avoid double counting (if that original Rs.5 note is not removed then we will have Rs.10 in the system)
Note: In case of ICICI App, I have to have a wallet balance before initiating transfer whereas the IDFC App provides auto-loading option wherein if the balance is not sufficient then a new eRupee will be created from the linked bank account’s balance.
Transfer/Spend — QR Code
eRupee had its own QR (Yuppy!!! One more QR)… but as expected it didn’t scale (so no Yuppy!!!).
So now eRupee works on a UPI QR (and thus once again UPI saves the day)
Collect:
If an eRupee user wants to collect funds from a payer, the user can generate a QR code for the amount.
Note: This is similar to the dynamic QR of UPI where the amount is embedded in the QR.
Redemption:
A user can convert the eRupee to regular money by redeeming the balance.
Wallet balance will be debited and the user’s bank account is credited in real-time
De-register:
A user can deregister the eRupee wallet
Upon deregistration, the available balance of eRupee wallet will be credited to the linked bank account in real-time.
By de-registering the wallet, the wallet address and the transaction history associated with that wallet will be deleted permanently. (Kind of losing the real wallet :))
Re-Register:
Once you re-register for eRupee again, a new wallet address will be created (Feels like buying a new wallet)
A lot can be improved here. I have pointed few of those points in ‘notes’ but most importantly why we need a separate App for eRupee (Especially for people like me whose phone’s battery dies every few hours)
eRupee is still in the kitchen so I am sure the process, payment flows and features will improve in the near future. But will it see the adaptation or scale of UPI?
Earth takes 365.25636 days to go around the Sun… when measure by the Stars. The difference (from our 365.242 days) is because even the Sun moves a little, relative to stars.
May be at this point, I am not seeings things in eRupee which others are/can. So will wait and watch how things unfold here.
