PhonePe has launched PhonePe UPI 123Pay, a new service that brings UPI payments to feature phone users without an internet connection.
Announced on August 31, the service uses a proprietary technology stack and an SMS-based architecture to enable UPI transactions, including in areas where internet access is unavailable or 2G connectivity is limited.
With this launch, PhonePe becomes the first major Third Party Application Provider (TPAP) to extend UPI payment capabilities to an estimated 200 million+ feature phone users across India.
The service is specifically designed for feature phones and is not intended for smartphone users.
PhonePe Partners With Nokia, HMD, Lava and itel
To make UPI 123Pay more accessible, PhonePe has partnered with handset manufacturers including Nokia, HMD, Lava International and itel.
The PhonePe UPI 123Pay service will be pre-bundled on supported feature phones, allowing users to access UPI payment functionality directly from their devices.
The service supports several types of transactions, including:
Peer-to-peer money transfers
Peer-to-merchant payments
QR code payments on feature phones equipped with cameras
Bank account management
Balance checks
Transaction history checks
PhonePe said the service provides step-by-step guidance in English and 12 Indian languages, making it easier for users unfamiliar with digital payment systems.
The company plans to introduce additional features through future updates, including utility bill payments, mobile recharges and Aadhaar-based onboarding.
PhonePe currently has more than 71.5 crore registered users and a merchant network comprising more than five crore partners.
How to Register for PhonePe UPI 123Pay
Users with a supported feature phone can activate the service by following these steps:
Open the pre-installed PhonePe app on the feature phone.
Read and accept the terms and conditions to complete the automated device registration.
Select the bank from the list of available options.
Enter the last six digits of the debit card and its expiry date.
Set the UPI PIN.
The user's UPI ID will then become active, allowing payments through PhonePe UPI 123Pay.
How to Make Payments
After registration, users can open the PhonePe app and choose from multiple payment options.
Users can select options such as Scan and Pay, Contact Book, Mobile Number or Pay to UPI.
For a mobile number or UPI payment, users can choose "Pay to Mobile Number/Pay to UPI ID" and enter the recipient's mobile number or UPI ID.
Feature phones equipped with a camera can also support QR code scanning and payments.
After entering or scanning the payment details, users must verify the recipient information, enter the amount, and provide their UPI PIN. Pressing OK confirms the transaction.
A confirmation screen then appears to indicate whether the payment completed successfully.
AI-Powered Assistance
PhonePe UPI 123Pay also incorporates advanced speech processing and AI reasoning to make the service easier to use.
The assistant can provide step-by-step guidance during activation and answer basic UPI-related questions. The aim is to provide a secure, frictionless payment experience even for users with limited experience in digital payments.
Bringing UPI to India's Feature Phone Users
PhonePe said the service is designed to address the needs of India's large feature phone user base. With an estimated 20 crore people using feature phones in the country, UPI 123Pay could expand access to digital payments among users who do not rely on smartphones or regular internet connectivity.
By using an SMS-based architecture, PhonePe aims to enable digital transactions even in locations where internet connectivity remains limited, potentially making UPI more accessible across India's smaller towns, rural areas, and regions with weaker network infrastructure.
