200M Feature Phone Users Get Digital Payments
PhonePe's UPI 123Pay enables digital transactions without internet, targeting rural and semi-urban areas with limited connectivity
PhonePe has launched UPI 123Pay, a service that enables feature phone users to make digital payments without an internet connection. The service is aimed at India’s more than 200 million feature phone users, bringing financial inclusion to rural and semi-urban areas where smartphone access and reliable internet connectivity can be limited.
The service uses an SMS-based architecture to enable UPI transactions without requiring an internet connection. PhonePe UPI 123Pay will come pre-installed on selected devices from Nokia, HMD, Lava International, and Itel Mobile. The company plans to add partnerships with more handset manufacturers in the coming months.
The service allows feature phone users to make peer-to-peer transfers, merchant payments, and manage their accounts without relying on mobile data. Users can make transactions using mobile numbers or UPI IDs and pay merchants through UPI IDs or QR code scanning on feature phones equipped with cameras. They can also manage their accounts, check balances, and view transaction histories.
PhonePe has introduced a voice-first, AI-powered helpline to assist users with the service, offering assistance in English and 12 Indian languages. The company plans to expand the platform with additional services, including utility bill payments, mobile recharges, and Aadhaar-based onboarding.
As of July, PhonePe had more than 71.5 crore registered users and over five crore merchants on its platform. Sameer Nigam, founder and CEO of PhonePe, said the initiative is intended to bring the “next 300 million users” into the digital payments ecosystem and further financial inclusion.
## Why it matters The launch of PhonePe UPI 123Pay is significant as it aims to bridge the gap in digital payments for feature phone users. In areas where connectivity is weak, users often face limitations in making digital transactions. This service is designed to expand access to digital payments beyond smartphones, improving financial inclusion in rural and semi-urban areas.
## What happens next PhonePe plans to add more features to the service, including bill payments, mobile recharges, and Aadhaar-based onboarding. The company also aims to partner with more handset manufacturers to increase the reach of the service. With the launch of UPI 123Pay, PhonePe has become the first major third-party application provider to extend UPI payments to feature phone users at scale, marking a significant milestone in the digital payments ecosystem in India.
