PhonePe launches UPI 123Pay for feature phone users in India
New service enables offline UPI transactions via SMS-based architecture for non-smartphone users
Quick Look
- Fintech major PhonePe has launched UPI 123Pay, allowing over 200 million feature phone users in India to conduct UPI transactions without internet.
- The service utilizes an SMS-based architecture and is pre-bundled on select Nokia, Lava, and itel devices.
AI-generated summary
Why It Matters
The service aims to bridge the digital divide by enabling UPI payments for users without smartphones or reliable internet access.
Fintech major PhonePe on Monday announced the launch of PhonePe UPI 123Pay, a service that allows feature phone users to make UPI transactions without requiring an internet connection. According to news agency PTI, the service makes PhonePe the first major third-party application provider (TPAP) to extend UPI payment capabilities to an estimated more than 200 million feature phone users across India. The service uses a proprietary technology stack and an SMS-based architecture, aimed at ensuring transaction reliability even in areas with limited 2G connectivity.
PhonePe has partnered with handset manufacturers including Nokia, HMD, Lava International and itel to provide the service pre-bundled on their devices. “Bringing UPI to feature phones through PhonePe UPI 123Pay extends the benefits of digital payments beyond smartphones to every corner of the country,” Sameer Nigam, founder and CEO of PhonePe, said. He said the initiative aims to promote financial inclusion by bringing the “next 300 million users” into the digital fold.
The platform allows users to make:
Peer-to-peer (P2P) transfers
Peer-to-merchant (P2M) payments
QR code payments, on feature phones equipped with cameras
Account management and balance checks
Transaction history checks
To help first-time users activate the service, PhonePe has also introduced a voice-first, AI-powered helpline. The assistant provides step-by-step guidance in English and 12 Indian languages. The company said future updates would add more features, including utility bill payments, mobile recharges and Aadhaar-based onboarding. As of July, PhonePe reported more than 71.5 crore registered users and a merchant network of over five crore partners. The new service is aimed at expanding access to digital payments among users who do not use smartphones.
What to Watch
AI outlook — possibilities, not facts
Future updates will include utility bill payments and mobile recharges.
Likely · Within months
Open Questions
- What is the specific transaction fee structure for these users?
- When will utility bill payments be enabled?
