PhonePe has launched its innovative 'PhonePe UPI 123Pay' service, empowering over 200 million feature phone users across India to conduct UPI transactions seamlessly without an internet connection, significantly advancing digital financial inclusion.
Key Points
- PhonePe has launched 'PhonePe UPI 123Pay' for feature phone users, enabling UPI transactions without internet.
- The service targets over 200 million feature phone users, aiming to expand digital payment access and financial inclusion.
- Utilising an SMS-based architecture, it ensures reliable transactions even in areas with limited 2G connectivity.
- Users can perform P2P and P2M transfers, check balances, and view transaction history, with QR code scanning for camera-equipped phones.
- An AI-powered helpline in 13 languages assists first-time users with activation and guidance.
Fintech major PhonePe on Monday announced the launch of 'PhonePe UPI 123Pay', a service that enables UPI transactions for feature phone users without the requirement of an internet connection. With this launch, PhonePe claims to have become the first major third-party application provider (TPAP) to extend UPI payment capabilities to an estimated more than 200 million feature phone users across the country.
How PhonePe UPI 123Pay Works
The service, built on a proprietary technology stack, utilises an SMS-based architecture to ensure transaction reliability even in regions with limited 2G connectivity. The company has partnered with handset manufacturers like Nokia, HMD, Lava International, and Itel Mobile (Transsion Holdings) 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," said Sameer Nigam, Founder and CEO, PhonePe. He added that the initiative aims to drive financial inclusion by onboarding the "next 300 million users" into the digital fold.
Expanding Digital Payment Access
The platform allows users to perform peer-to-peer (P2P) transfers and peer-to-merchant (P2M) payments. For feature phones equipped with cameras, the service also supports QR code scanning. Additionally, users can manage accounts, check balances and view transaction histories.
To assist first-time users, the company has introduced a voice-first, AI-powered helpline. The assistant provides step-by-step activation guidance in English and 12 Indian languages.
PhonePe stated that future updates will introduce additional capabilities, such as utility bill payments, recharges and Aadhaar-based onboarding.
As of July 2026, PhonePe reported a user base of over 71.5 crore registered users and a merchant network of over five crore partners.
