Reliance Retail To Start Accepting India’s Retail CBDC For Payments

India’s largest retail chain Reliance Retail has started accepting the e-rupee for payments in its stores.

The initial rollout is limited to one store in Mumbai, but the company plans to eventually accept the retail central bank digital currency (CBDC), popularly known as e-rupee, across all of its 17,000 stores, said V. Subramaniam, managing director at Reliance Retail, said during a public event on Feb. 2. Reliance Retail is working with ICICI Bank Ltd., Kotak Mahindra Bank Ltd., and Innoviti Technologies Pvt.—a company that helps with payments—on the rollout of CBDC.

The Reserve Bank of India "launched it on a trial basis, but now they want to take it commercial", Subramaniam said during the event. The discussions to start accepting the CBDC at Reliance Retail started following the launch of the retail CBDC pilot in December 2022, and the technological work to implement it took about three weeks, Rajeev Agrawal, chief executive officer at Innoviti, told BQ Prime.

"We will see both form factors coexist," Deepak Sharma, chief digital officer at Kotak Mahindra Bank, said at the event, referring to the comparisons between the unified payments interface and the retail CBDC. For businesses, the "biggest upside is that they no longer have to handle cash", Bijith Bhaskar, head of digital channels at ICICI Bank, said at the event.

The CBDC will both reduce the cash handling costs for merchants and could allow them to bargain for better rates from banks for the services offered for handling the digital currency. The latter is enabled by the fact that CBDC wallets offered by multiple banks are interoperable, so consumers can move money between them seamlessly, Agrawal said during the event.

Although the CBDC can only be issued in fixed denominations such as Rs 5, Rs 10, Rs 20, or Rs 100, the problem of getting change back from the merchant is solved through dynamic QR code-based transactions, which allow the receiver to return the required change in an automated way, Sharma said. "The experience is exactly like cash," Bhaskar said.

The launch at Reliance Retail is part of the ongoing CBDC pilot being run by the RBI. In the future, CBDC could also end up being used in cases that are currently enabled by prepaid instruments, Agrawal told BQ Prime.