PhonePe, a leading Indian fintech owned by Walmart, has rolled out UPI payment capabilities for feature phones through its new service, PhonePe UPI 123Pay. This initiative allows users to perform digital transactions without needing a smartphone or internet connection, expanding financial inclusion across India.
- Enables UPI payments on 20+ crore feature phones without internet
- Pre-installed on handsets from Nokia, Lava, HMD, and Itel
- AI-powered helpline supports activation in 13 languages
What happened
PhonePe launched a new UPI payment service called PhonePe UPI 123Pay designed specifically for feature phones, which primarily handle basic calling and texting functions without internet access. This SMS-based payment solution lets users send money peer-to-peer and pay merchants using their mobile numbers, UPI IDs, or QR codes on compatible devices.
The service comes pre-installed on feature phones from manufacturers like Nokia, HMD, Lava International, and Itel Mobile, targeting more than 200 million feature phone users in India. PhonePe also introduced a voice-first, AI-powered helpline available in English and 12 Indian languages to assist users with registration and usage.
Why it matters
With smartphone penetration and reliable internet still uneven in many parts of India, extending UPI payments to feature phones is a major step toward financial inclusion. By leveraging SMS and IVR technologies, PhonePe’s service overcomes connectivity and technological barriers that restrict access to digital payments for millions.
This launch positions PhonePe as the first major third-party app provider enabling large-scale UPI adoption on feature phones, expanding its user base beyond smartphone holders. It also aligns with efforts by the Reserve Bank of India to promote offline UPI payment methods to make the ecosystem more accessible.
What to watch next
PhonePe plans to expand its handset partnerships beyond the initial manufacturers to reach more feature phone users in India’s rural and semi-urban regions. Observers will be watching how rapidly adoption occurs and whether this approach drives significant increases in digital payment volumes among underserved populations.
Additionally, PhonePe’s financial performance, including its upcoming IPO plans and how well it monetizes this expanded user base, will be closely monitored amid rising competition in the Indian UPI ecosystem dominated by Google Pay and others.