PhonePe Launches UPI 123Pay for Feature Phone Users

PhonePe launched UPI 123Pay in India to enable digital payments for feature phone users without requiring an internet connection. The service uses an SMS-based architecture developed by the National Payments Corporation of India (NPCI), allowing users to send and receive money, check bank balances, and view transaction histories. For users with camera-equipped devices, the service supports QR code scanning.

To support an estimated 200 million feature phone users, the service is pre-bundled on devices from HMD, Nokia, Lava International, and Itel Mobile-Transsion Holdings. PhonePe also introduced a voice-first, AI-powered helpline available in English and 12 Indian languages to assist with onboarding. The company aims to bring 300 million additional users into the digital financial ecosystem, with future updates planned for utility bill payments and Aadhaar-based onboarding.

Parallel to these efforts, the NPCI is developing the Unified Agent Protocol to allow AI agents to execute small digital payments via UPI without per-transaction approval. Expected to be unveiled at the Global Fintech Fest in Mumbai, the protocol will use rule-based instructions and spending limits for low-value purchases. This development coincides with similar agentic payment initiatives from Mastercard, Visa, and Pine Labs.