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UPI 123Pay Takes Digital Payments To All Phones

RBI launches UPI 123Pay for feature phone users.



A man uses a mobile phone while sitting in a street in Mumbai (Photographer: Dhiraj Singh/Bloomberg)
A man uses a mobile phone while sitting in a street in Mumbai (Photographer: Dhiraj Singh/Bloomberg)

In an attempt to popularise payments via the Unified Payments Interface on feature phones, the Reserve Bank of India has launched UPI 123Pay.

While UPI payments were possible on feature phones, they were cumbersome, making it tough for nearly 40 crore users to pay via the now popular means of payment.

With UPI 123Pay, the RBI hopes that UPI payments will become popular with feature phone users as they have been with smartphone users.

"UPI transactions have grown more than five times in the last four years from 4 crore to 23 crore transactions. But a large part of this digitisation is getting limited to those who hold a smartphone," said T Rabi Sankar, deputy governor of the RBI at an event. "There are more limited payment options available for feature phone users," he said.

How UPI 123Pay Will Work

The new payment option can be used via missed calls, interactive voice response (IVR), app functionalities and proximity sound-based systems.

  • UPI 123Pay users can link their bank accounts and set up a UPI pin.

  • Payments can be made via predefined IVR numbers using this facility.

  • They can also be made by systems that use sound waves to enable payments.

  • Nearly all UPI functionalities available on a smartphone will be made available on feature phones, with the exception of scan and pay. This feature, the RBI said, is still a work in progress.

To take the development of UPI to the next stage, the payments interface must be made available both offline and in feature phones, Rabi Sankar said.

Next Milestone: Rs 100 Lakh Crore?

Developed by the National Payments Corporation of India, UPI has become the most successful mode for digital transactions. In the month of February 2022, UPI recorded 453 crore transactions worth Rs 8.27 lakh crore. In the current financial year, UPI has already seen Rs 76 lakh crore worth of transactions, compared with Rs 41 lakh crore in FY21.

"The launch of UPI 123Pay makes the facilities under UPI now accessible to that section of society which was so far excluded from the digital payment landscape. In that way, it is promoting a great deal of financial inclusion in our economy," said Shaktikanta Das, governor of RBI.

UPI could soon record transactions worth Rs 100 lakh crore, said Das.

The RBI had first talked about launching UPI payments for feature phones in December 2021, leveraging on options it had tested in the regulatory sandbox. According to data available with the RBI, nearly 50% of all UPI transactions are worth less than Rs 200 each.