PhonePe has launched 'UPI 123Pay', allowing feature phone users to make digital payments without requiring a smartphone or an internet connection.
The move targets more than 200 million feature phone users across India and seeks to expand access to UPI in areas where smartphones and reliable internet remain limited.
PhonePe said on Monday that it has become the first major third-party application provider to offer UPI payments through feature phones.
The service uses an SMS based system designed to support transactions even in areas with limited 2G connectivity.
Users can make person-to-person transfers using mobile numbers or UPI IDs. They can also pay merchants through UPI IDs and QR codes.
The service further allows users to check bank balances and transaction histories.
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Service Comes Pre-Installed on Select Phones
PhonePe UPI 123Pay will initially come pre-installed on feature phones from Nokia, HMD, Lava International and Itel Mobile, with more handset makers expected to join the platform.
Setting up the service does not require a smartphone. Users can open the PhonePe app on their feature phone, accept the terms, select their bank and enter the last six digits of their debit card and expiry date. They can then create a UPI PIN and activate their UPI ID.
PhonePe plans to add bill payments, mobile recharges and Aadhaar-based UPI onboarding through future updates.
The company has also introduced an AI-powered voice helpline to assist users during activation. The voice assistant supports English and 12 Indian languages and provides step by step guidance.
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PhonePe Founder and CEO Sameer Nigam said the service aims to extend digital payments beyond smartphones and help bring the next 300 million users into India's digital financial system.
As of July 2026, PhonePe had more than 71.5 crore registered users and an acceptance network covering over 5 crore merchants.
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