PhonePe Brings UPI Payments to Feature Phones Without Internet

PhonePe has launched a new digital payment service that will allow feature phone users across India to make UPI transactions without requiring an internet connection. Called PhonePe UPI 123Pay, the initiative is aimed at expanding digital payment access to more than 200 million feature phone users and strengthening financial inclusion in areas where smartphone ownership and reliable internet connectivity remain limited.

The service uses an SMS-based technology architecture designed to support transactions even in locations with limited 2G connectivity. PhonePe said the platform will allow users to carry out peer-to-peer transfers through mobile numbers or UPI IDs, while payments to merchants can be made using UPI IDs and, on compatible devices, by scanning QR codes.

The company has partnered with handset manufacturers including Nokia, HMD, Lava International and Itel Mobile to make the service available on selected feature phones. The facility will come pre-installed on compatible devices, with additional manufacturers expected to join the programme in the coming months.

Beyond sending money, users will be able to manage their linked bank accounts, check account balances and review transaction histories. PhonePe plans to expand the service further by introducing facilities such as bill payments, mobile recharges and Aadhaar-based onboarding for UPI.

The registration process has also been designed to work without a smartphone or internet connection. Users can open the pre-installed PhonePe application, accept the terms and conditions, select their bank and enter the required debit card details before setting a UPI PIN.

To help people who may be unfamiliar with digital payments, PhonePe has introduced a voice-first, AI-powered support service. The helpline provides step-by-step assistance in English and 12 Indian languages, helping users activate the service and understand basic UPI functions. PhonePe founder and CEO Sameer Nigam said the initiative is intended to take digital payments beyond smartphones and reach users who have traditionally remained outside the digital financial ecosystem.

The launch is particularly significant for rural and semi-urban communities, where feature phones continue to have a substantial user base and internet access can be inconsistent. By bringing UPI functionality to basic handsets, PhonePe aims to reduce the technology barrier to digital payments and bring millions of additional users into India’s growing digital economy.