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August 26, 2026
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- Mon, 31 August 2026
PhonePe has launched UPI 123Pay for feature phone users in India, allowing people to make digital payments without requiring an internet connection.
The move is aimed at extending UPI access to India’s large feature phone user base, particularly people who may not own smartphones or have reliable access to mobile data.
PhonePe said the service is designed for more than 200 million feature phone users across the country.
India’s digital payments ecosystem has grown rapidly, with UPI becoming one of the country’s most widely used payment systems.
However, much of this growth has been driven by smartphone users.
Feature phone users have remained a significant untapped segment, particularly in regions where smartphone ownership and reliable internet connectivity are still limited.
PhonePe’s UPI 123Pay launch attempts to address this gap by making digital transactions possible without an active internet connection.
The service uses an SMS based system designed to function in areas with limited 2G connectivity.
Users can register directly on a compatible feature phone without needing a smartphone or internet access.
After opening the pre installed PhonePe application, users select their bank and complete the required registration process before creating a UPI PIN.
Once activated, users can send money using mobile numbers or UPI IDs and make payments to merchants.
Feature phones with camera support can also scan QR codes to complete payments.
Users can additionally check account balances, manage accounts and view transaction histories.
The service will be pre bundled on selected feature phones from Nokia, HMD, Lava International and Itel.
PhonePe has said that it expects to expand partnerships with additional handset manufacturers in the coming months.
Pre installation could play an important role in simplifying adoption, especially for users who may be new to digital payments.
PhonePe has also introduced an AI powered voice helpline to help users set up and navigate the service.
The assistant supports English and 12 Indian languages and is designed to provide step by step guidance during activation.
Instead of relying entirely on traditional interactive voice response systems, users can receive assistance with basic UPI related questions through voice based support.
PhonePe said future updates to UPI 123Pay will introduce additional services, including bill payments, mobile recharges and Aadhaar based onboarding.
These additions could make feature phones increasingly capable of handling a broader range of digital financial activities.
The launch comes as PhonePe continues to operate at significant scale in India’s UPI ecosystem.
The platform processed around 10.86 billion UPI transactions in July 2026, compared with approximately 10.48 billion transactions in June.
The July transactions were valued at around Rs 14.44 lakh crore.
Across the wider UPI ecosystem, approximately 23.66 billion transactions worth Rs 29.88 lakh crore were processed during the same month.
PhonePe’s latest move highlights the next challenge for India’s digital payments ecosystem.
The question is no longer only how to make payments faster for smartphone users.
It is increasingly about how to make digital payments accessible to people regardless of the device they use or the quality of their internet connection.
By bringing UPI to feature phones, PhonePe is betting that the next major phase of digital payments growth could come from users who have so far remained outside the smartphone led fintech boom.
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