PhonePe launches UPI 123Pay, a pioneering SMS-based digital payment service designed for over 200 million feature phone users in India, expanding financial inclusion in rural and semi-urban areas.
PhonePe has rolled out a UPI service for India’s feature phone users, allowing people without smartphones or mobile data to make digital payments through its new PhonePe UPI 123Pay offering. The company says the service is designed for more than 200 million feature phone users and is aimed at widening access to digital transactions in rural and semi-urban areas where internet coverage remains patchy. According to PhonePe, the product is built on an SMS-based system that can complete bank-to-bank transfers even on limited 2G connectivity.
The service is pre-installed on selected handsets from Nokia, HMD, Lava International and Itel Mobile, marking one of the most ambitious efforts yet by a major third-party UPI app to reach basic keypad-phone users at scale. PhonePe says users will be able to send money to mobile numbers or UPI IDs, pay merchants, check balances and review transaction history without needing a smartphone or data plan.
For users with a rear camera, the system will also support QR-code scanning at shops, extending a feature long associated with smartphone-based UPI payments to lower-cost devices. PhonePe has also said later updates are expected to add utility bill payments, mobile recharges and Aadhaar-based UPI onboarding, which could make the service more useful for first-time digital payment users.
To help people unfamiliar with digital payments, the company has introduced an AI-powered voice assistant in English and 12 Indian languages. Rather than relying on conventional interactive voice response menus, the assistant is meant to guide users step by step through registration and payment. PhonePe said the broader goal is to bring more of India’s non-smartphone users into the digital economy.
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