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No Smartphones? Don’t Worry! RBI Launches 123PAY – UPI Based Payment System For Basic Feature Phones



No Smartphones? Don’t Worry! RBI Launches 123PAY - UPI Based Payment System For Basic Feature Phones

NEW DELHI: Governor Shaktikanta Das of the Reserve Bank of India (RBI) launched a new unique payments interface (UPI) for feature phones on Tuesday in a bid to boost digitisation and improve the safety of online transactions. He said the API will allow India’s 40 crore feature phone users to access the payment service.

Governor Das, who dubbed the UPI platform ‘123PAY,’ also announced the launch of a digital payments helpline – ‘DigiSaathi,’ at a special RBI event. He stated that ‘excluded persons’ from the lower socioeconomic strata, particularly in rural areas, will now be able to use UPI services.

Das noted that the implementation of this new UPI for feature phones will assist the National Payments Corporation of India (NPCI), which operates retail payments and settlement systems in India, in reaching its target of processing a billion transactions per day.

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UPI 123Pay would also assist the RBI to achieve its goal of a cashless economy, according to Das, who said that feature phone users will have more limited payment alternatives.

UPI has become a popular method of payment via smartphone. According to Das, the number of digital transactions has increased by five fold, with a substantial portion of this limited to those with smartphones.

At present, efficient access to UPI is available on smartphones. UPI can be accessed through NUUP (National Unified USSD Platform) using the shortcode of *99#. But this option is cumbersome and not popular. Considering that there are more than 40 crore feature phone mobile subscribers in the country, UPI123pay will materially improve the options for such users to access UPI.

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UPI123Pay includes four distinct options as below:

  1. App-based Functionality: An app would be installed on the feature phone through which several UPI functions, available on smartphones, will also be available on feature phones.
  2. Missed Call: This will allow feature phone users to access their bank account and perform routine transactions such as receiving, transferring funds, regular purchases, bill payments, etc., by giving a missed call on the number displayed at the merchant outlet. The customer will receive an incoming call to authenticate the transaction by entering UPI PIN.
  3. Inter-active Voice Response (IVR): UPI payment through pre-defined IVR numbers would require users to initiate a secured call from their feature phones to a predetermined number and complete UPI on-boarding formalities to be able to start making financial transactions without internet connection.
  4. Proximity Sound-based Payments: This uses sound waves to enable contactless, offline, and proximity data communication on any device.

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According to the officials, customers will be able to make payments to friends and family, pay utility bills, recharge their vehicles’ FAST Tags, pay mobile bills, and check account balances, according to the company. Customers will also be able to link bank accounts and set or update UPI PINs.

Furthermore, the ‘Digisaathi’ helpline will be available 24 hours a day, 7 days a week to assist callers/users with all their digital payment-related questions through website and chatbot.

For questions about digital payments and issues, users can go to or contact 14431 and 1800 891 3333 from their phones.

Industry Welcome The Move

“The much-awaited UPI through feature phones from RBI has re-established India in the leadership path on digital payments. Surmounting the USSD challenges, NPCI has launched a simple and easy to use feature phone UPI Payment functionality. This text/message based payment mechanism will pave way for more adoption of cashless payments in rural India given the 400 million feature phone users. The DigiSaathi helpline and UPI123Pay are bound to see further innovations that can orchestrate payments across industry verticals,” said Muralidharan Srinivasan, Head of Payments, APMEA Region, FIS.

“Comprising for more than 60% of total payments by volume UPI has been at the forefront of digitising retail payments in India. It has also been extremely successful in replacing cash and digitising low-value transactions as well. However, currently, UPI requires a smartphone and access to internet.

RBI’s ‘UPI 123PAY’ is an excellent initiative to bridge the digital divide and aid the penetration of digital services among low-income groups. USSD based services offers access to fairly complex and comprehensive applications even in the absence of mobile data connectivity or smartphones. It has therefore acted as a last-mile payment technology propelling growth of digital payments especially across the under-penetrated rural hinterlands. With the current move, the simplicity and security of UPI-based digital payment solutions can now be offered on all feature phones which will aid wider digitisation among a large segment of people without access to smartphones or internet services,” said Mandar Agashe, Vice-Chairman & MD, Sarvatra Technologies ltd.

Meanwhile, Anand Kumar Bajaj, Founder, MD & CEO, PayNearby said, “It is a game-changer move that will bring about a transformational shift in the digital payments landscape in the country as it will allow digital payments to move from the confines of smartphones to feature phones. Now, customers will be able to use feature phones for almost all transactions.”

Bajaj added, “This move is designed to increase the digital penetration of financial services and help people at the bottom of the pyramid, who cannot afford smartphones, to participate in UPI transactions and thus, bring a majority of them into the digitization fold. As it does not require an internet connection, it will empower regional rural markets, where internet connectivity is still erratic, to join the digital payments bandwagon. Additionally, it will encourage higher volumes of digital transactions across hinterlands in the country, which will eventually bridge the India-Bharat digital divide and help us move towards a less-cash economy.”

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