900 319 0030

QR Code-based Coin Vending Machines (QCVM)

iasparliament Logo
February 15, 2023

Why in news?

Reserve Bank of India (RBI) has recently announced to launch QR code based Coin Vending Machines as a pilot project.

What is QR code-based coin vending machine?

  • At present, a person will have to approach the bank branch to withdraw coins.
  • QR code-based coin vending machine (QCVM) is intended to dispense coins similar to the manner in which currency notes can be withdrawn from ATMs.
  • Coins can be withdrawn using the Unified Payments Interface (UPI) QR code in designated vending machines.
  • Coins of denomination of Rs 1 - Rs 20 will be made available in QCVM.
  • RBI plans to launch the product in 19 locations across 12 cities.
  • Since the implementation would begin through a pilot launch, only select banks may be involved in the initial stages.

UPI is a system that powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund routing & merchant payments into one hood.

What are the pros and cons of this move?

Pros of QCVM

  • The main intention is to enhance the last mile availability of cash across segments including the mass market.
  • Since the interface here is UPI which is linked to the bank account of the person, the value of coins withdrawn is directly debited from the bank account.
  • It removes the requirement of tending notes in exchange of coins which saves time for the bank branches and the customer.
  • It will enhance ease of access to coins.
  • With cash sales still being an important component at petty shops, QCVM could benefit vendors when coins tend to be in short supply.

Cons of QCVM

  • As banks have to keep replenishing these vending machines through third part agents, it could imply additional costs for banks.
  • The average cost of minting a coin is Rs 1.11. If we add another layer for setting up and distributing coins through vending machines, it appears unattractive from a cost perspective.
  • Since the intent of the government is on increasing the popularity and reach of digital payments, QCVM could be counterproductive.
  • QCVM seems to be defying the purpose of e-Rupee’s retail that aims to reduce the minting/printing cost of currency and gradually replace physical currencies with digital currencies.

e-Rupee, an electronic version of cash in the form of a digital token is the Central Bank Digital Currency (CBDC) issued by the Reserve Bank of India (RBI).



  1. Businessline | Why QR code-based coin vending machines defy idea of digital India


Login or Register to Post Comments
There are no reviews yet. Be the first one to review.



Free UPSC Interview Guidance Programme