No smartphone, no internet, no problem: PhonePe launches UPI 123Pay to let 200 million+ feature phone users make digital payments; here’s how it works

PhonePe on Monday launched UPI 123Pay, a new service that allows feature phone users across India to make UPI payments without an internet connection.

The service is aimed at India’s more than 200 million feature phone users and is designed to expand access to digital payments beyond smartphones. PhonePe said it is the first major third-party application provider (TPAP) to bring UPI payments to feature phones at this scale.

The launch is also aimed at improving financial inclusion, particularly in rural and semi-urban areas where smartphone access and reliable internet connectivity can still be limited.


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How does PhonePe UPI 123Pay work on feature phones?

PhonePe UPI 123Pay uses an SMS-based architecture to enable UPI transactions without requiring an internet connection.

The service is designed to work even in areas with limited 2G connectivity. Users can make peer-to-peer payments using mobile numbers or UPI IDs, as well as peer-to-merchant payments through UPI IDs and QR codes on supported devices.

Feature phone users will also be able to check their bank account balance and view their transaction history through the service.

Which feature phones support PhonePe UPI 123Pay?

PhonePe UPI 123Pay will come pre-bundled on selected devices from Nokia, HMD, Lava International and Itel Mobile, part of Transsion Holdings.

PhonePe said it plans to add partnerships with more handset manufacturers in the coming months.

The service is built on a technology stack developed specifically to enable UPI payments on feature phones.

What features will PhonePe UPI 123Pay offer?

The service allows feature phone users to make several types of digital payments without relying on mobile data.

Users can currently make peer-to-peer transfers through mobile numbers or UPI IDs and make merchant payments using 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 said future updates will add features such as bill payments, mobile recharges and Aadhaar-based onboarding onto UPI.

PhonePe launches AI-powered helpline for feature phone users

To help users activate and use the service, PhonePe has also introduced a voice-first, AI-powered helpline.

Unlike traditional IVR systems that rely on fixed menu options, the conversational voice assistant is designed to provide step-by-step guidance and answer basic UPI-related questions.

The assistant supports English and 12 Indian languages and uses speech processing and AI reasoning to help users complete the activation process.

How to register for PhonePe UPI 123Pay

Users can register for the service directly on a supported feature phone without using a smartphone or an internet connection.

The process involves:

• Open the pre-installed PhonePe app on the feature phone.
• Read and accept the terms and conditions to complete device registration.
• Select the user's bank from the list.
• Enter the last six digits of the debit card and its expiry date.
• Set a UPI PIN.
• Once the UPI PIN is set, the UPI ID becomes active and users can begin making payments through PhonePe UPI 123Pay.

How to make UPI payments on a feature phone

PhonePe users can access several payment options through the feature phone app, including Scan & Pay, contacts, mobile numbers and UPI IDs.

To pay using a mobile number or UPI ID:

• Open the PhonePe application.
• Select ‘Pay to Mobile Number/Pay to UPI ID’.
• Enter the recipient's mobile number or UPI ID.
• Check the payment details.
• Enter the amount and UPI PIN, then press OK to confirm the payment.
• The next screen will confirm whether the payment was successful.

Feature phones with camera support can also use the Scan & Pay option to make payments by scanning a QR code.