PhonePe Launches UPI Payments For 200M Feature Phone Users

PhonePe has launched UPI 123Pay, a service that allows feature phone users to make digital payments without needing an internet connection. This move makes PhonePe the first major third-party application provider to extend UPI payments to feature phone users across India.

The service aims to bridge the last-mile access gaps in rural and semi-urban India, where smartphone penetration and reliable internet remain inconsistent. According to PhonePe, there are over 200 million feature phone users in India, and the company hopes to onboard the next 300 million users into the digital financial fold.

PhonePe UPI payments work on feature phones using the UPI 123 protocol, developed by NPCI specifically for feature phones that lack internet or data capability but support SMS. The system relies on an SMS-based architecture designed to function even in areas with limited 2G connectivity.

To use PhonePe UPI 123Pay, users need to activate the service on their feature phone, which is available on select models. They can then send money via mobile number or VPA, scan and pay using QR codes on camera-enabled phones, pay merchants directly using UPI IDs, and check their bank balance and transaction history.

The service comes pre-bundled on devices from manufacturers such as Nokia, HMD, Lava International, and Itel Mobile-Transsion Holdings, with more tie-ups expected in the coming months. To assist first-time users, PhonePe has introduced a voice-first, AI-powered helpline that offers step-by-step activation guidance in English and 12 Indian languages.

In the future, PhonePe plans to add utility bill payments, recharges, and Aadhaar-based onboarding to the platform. This launch reflects PhonePe's commitment to building for India and meeting people where they are, according to founder and CEO Sameer Nigam.

The launch of UPI 123Pay is significant for India's digital payments landscape, as it aims to increase financial inclusion and provide access to digital payments for a large segment of the population. With this move, PhonePe is poised to play a major role in shaping the country's digital payments ecosystem.

The service is expected to have a positive impact on the lives of feature phone users, who will now be able to make digital payments without needing an internet connection. This will not only increase convenience but also provide a safer and more secure way to make transactions.

In conclusion, PhonePe's launch of UPI 123Pay is a significant development in India's digital payments space, and it has the potential to make a positive impact on the lives of millions of feature phone users across the country.