For roughly 200 million Indians, UPI has always been something that happens on someone else’s phone. PhonePe UPI 123Pay is an attempt to change that. It lets feature phone users send and receive money without a smartphone. It does not need mobile data either. The company showcased the service at the Global Fintech Fest 2026.
What works without internet
Feature phone users can make peer to peer transfers using mobile numbers or UPI IDs. Those with a camera on their handset can pay merchants by scanning QR codes, or by entering a UPI ID. Users can also manage their account, check balances and view transaction history. None of it needs a data connection.
PhonePe said future updates will add bill payments, mobile recharges and Aadhaar based onboarding. That would bring the feature phone experience closer to what a smartphone user gets today.
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Built with Nokia, Lava and Itel
The service runs on a technology stack developed specifically for UPI payments on feature phones. PhonePe has tied up with handset makers Nokia, HMD, Lava International and Itel Mobile, part of Transsion Holdings. It plans to add more handset partners in the coming months.
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Registration happens on the phone itself, with no smartphone or internet involved. A user opens the pre installed PhonePe app and accepts the terms. Then they pick a bank, enter the last six digits of the debit card with its expiry date, and set a UPI PIN. Once the PIN is set, the UPI ID becomes active.
An AI helpline in 12 languages
To help first time users get started, PhonePe has built a voice first, AI powered helpline. The usual IVR menus make callers press numbers. This assistant holds a conversation instead. It answers basic UPI questions and walks users through activation step by step. It supports English and 12 Indian languages.
Why it matters
India’s digital payments story is often told through smartphone numbers. That leaves out a large chunk of the country. A feature phone user cannot get on UPI, so they deal in cash or depend on someone else’s phone. If the service works as smoothly as the demo suggests, the next wave of UPI growth will not come from people who already have the app. It will come from the ones who never had a chance to install it.