PhonePe Brings UPI to Feature Phones Without Internet

A feature phone from Nokia, HMD, Lava International or Itel Mobile will come with a payment service already installed. PhonePe has launched UPI 123Pay, bringing UPI payments to basic phones that handle calls and texts, without requiring an internet connection. The company says the service can reach more than 20 Cr feature-phone users in India.

The mechanism is deliberately modest. UPI 123Pay processes transactions through SMS, including in areas with limited 2G connectivity. A user can send money through a mobile number or UPI ID, while merchants can be paid through a UPI ID or a QR code on camera-enabled devices. Activation requires selecting a bank, entering the last six digits and expiry date of a debit card, and setting a UPI PIN.

PhonePe is pairing the transaction system with a voice-first, AI-powered helpline available in English and 12 Indian languages. The company says it plans to add more handset partners in the coming months. Its chief executive and founder, Sameer Nigam, framed the rollout as a way to extend digital payments beyond smartphones.

The launch follows the RBI’s introduction of UPI123Pay, an offline version of UPI, in 2022. PhonePe acquired Gupshup’s proprietary GSPay technology in June 2025 and said it would customise that technology for a feature-phone payment service. PhonePe’s claim to be the first major third-party application provider to extend UPI to feature phones at scale is not independently established here.

So what changes for users? People with compatible feature phones may be able to make peer-to-peer transfers or pay participating merchants without a smartphone or a conventional internet connection. That matters most where 2G is available but smartphone access and reliable data service are inconsistent. The limits are concrete: the handset must be compatible, QR payments require a camera, and registration still depends on a debit card and UPI PIN. UPI usage is already substantial: NPCI data put July volume at 23.66 Bn transactions, up 4% from 22.72 Bn in June, while PhonePe reported 1,085.8 Cr transactions worth ₹14.4 Lakh Cr during the month.