PhonePe has also launched UPI 123Pay, a service that will enable the use of feature phones with no internet connection to transact in UPI transactions. The move expands PhonePe's digital payment services beyond smartphones and targets more than 200 million non-smartphone users across India.
The service was launched on Monday and was introduced in partnership with feature phone manufacturers like Nokia, HMD, Lava International and Itel Mobile. The UPI service is preloaded on supported devices so users can receive digital payments without needing a smartphone or mobile internet.
How PhonePe UPI 123Pay Works
PhonePe UPI 123Pay utilizes a patented technology stack with an SMS-based architecture. This is to make transactions reliable even in areas where users have limited access to 2G connectivity.
The service is targeted at people who use basic mobile phones but still want digital payments. With the new system, users could make peer-to-peer transfers as well as peer-to-merchant payments.
That means feature phone users can send money to another person and make payments to merchants without using an internet-based smartphone application. And it also allows QR code scanning on feature phones with cameras.
Users will also be able to manage accounts using the service. PhonePe said they can check their bank balances and their transaction history, and have access to several commonly used payment features.
The company has also set up a voice-first, AI-powered helpline for people who are using the service for the first time. The assistant is designed to guide users through the activation process step by step.
The helpline will be available in English and 12 Indian languages, which PhonePe says is intended to make the service easier to use for people who may not be familiar with digital payment technology.
Service Targets Over 200 Million Users
PhonePe said the new service could help bring digital payments to an estimated more than 200 million feature phone users in India.
Sameer Nigam, the founder and CEO of PhonePe, said bringing UPI to feature phones would extend the benefits of digital payments beyond smartphones. He said the aim is to bring the “next 300 million users” into the digital ecosystem.
The launch is particularly focused on increasing access to digital payments among people who don’t use smartphones. A feature phone can provide basic calling and messaging functions without the range of internet-based applications available on smartphones.
By preloading UPI 123Pay on supported devices, PhonePe is also trying to reduce the steps users need to take before accessing digital payments.
The company has collaborated with several handset manufacturers for the rollout. Nokia, HMD, Lava International and Itel Mobile are among the manufacturers supporting the service on their feature phone devices.
More Features Planned
PhonePe said the current service will be expanded with more capabilities in future updates.
These features will include utility bill payments, mobile recharges and Aadhaar-based onboarding. These features would allow users to carry out more everyday financial and payment-related activities through compatible feature phones.
For now, the service is focused on basic UPI functions such as money transfers, merchant payments, account management, balance checks and transaction history. QR code payments are also available on feature phones equipped with cameras.
The launch comes as UPI has increasingly entered India’s digital payments ecosystem. PhonePe already has a huge user base and merchant base, which gives it a great network from which to scale the service and to expand it.
At the end of July 2026, PhonePe had more than 71.5 crore registered users and more than five crore partners. The company is now trying to extend that ecosystem to users who use feature phones.
PhonePe's UPI 123Pay is therefore an extension of its payment platform to a segment of customers who have mostly not been using smartphone-based payment apps. With feature phone compatibility, an SMS-based system and voice assistance, it aims to make digital payments available even where internet access is limited.
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