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 Indian fintech giant PhonePe has rolled out UPI 123Pay, a new service enabling feature phone users to conduct digital payments and money transfers without an internet connection. The initiative is strategically aimed at bringing financial inclusion to the country's estimated 200 million feature phone users.

Bridging the Digital Divide

The service facilitates peer-to-peer (P2P) transfers, merchant payments, balance inquiries, and transaction history checks. Operating on an SMS-based framework, UPI 123Pay is designed to function seamlessly even in remote areas with limited 2G network coverage.

To ensure immediate accessibility, the service comes pre-installed on select feature phones from major brands including Nokia, HMD, Lava, and Itel. In addition to offline text-based transfers, the supported devices also feature QR code scanning capabilities for direct, localized payments.

AI Support and Future Expansions

Alongside the payment system, PhonePe introduced an AI-powered voice assistant. Available in English and 12 regional Indian languages, the assistant is designed to guide new users through the activation process and help them navigate their transactions smoothly. The company has already outlined plans for upcoming updates, which will introduce utility bill payments, mobile network recharges, and Aadhaar-based registration to further simplify the onboarding process.

Market Dominance

This strategic launch arrives as PhonePe continues to solidify its commanding lead in India's digital payments ecosystem. According to recent data from the National Payments Corporation of India (NPCI), the platform processed a staggering 11 billion UPI transactions in July. Over the course of the month, PhonePe captured 45.89% of the total UPI transaction volume and processed approximately 14.44 trillion rupees in value, securing a dominant 48.33% share of the overall system's transaction value.