PhonePe is set to introduce a Unified Payments Interface (UPI) solution tailored for new feature phone users in India. The company focused on digital payments and financial services, announced that its forthcoming solution will utilize the National Payments Corporation of India’s (NPCI) UPI 123PAY technology. The new service will leverage the conversational engagement platform Gupshup’s GSPay technology stack and aims to provide essential UPI features for feature phone users. However, it is anticipated that it may take several quarters before the service is officially available in the country.
PhonePe’s UPI Solution for Feature Phones Built on GSPay Technology
In a press release, PhonePe revealed that it has acquired the intellectual property associated with Gupshup’s GSPay technology. The company plans to customize the platform and develop its UPI solution around it. Gupshup initially introduced GSPay in 2023, providing an SMS-based payment experience designed specifically for feature phones.
PhonePe noted that GSPay was developed following the guidelines of the NPCI’s UPI 123Pay service, which was initiated in 2022 under the tenure of then-RBI Governor Shaktikanta Das. By enhancing the GSPay technology stack, PhonePe aims to create a robust UPI solution.
UPI 123Pay is a real-time payment solution that operates without requiring internet access, catering to feature phone users and those facing connectivity challenges. This service includes four transaction methods: dialing an interactive voice response (IVR) number, utilizing an app-based service, leveraging a missed call approach, and employing a sound-based proximity payment mechanism.
The upcoming UPI solution will provide a variety of features, supporting person-to-person (P2P) transfers, offline QR code payments, and enabling users to receive funds from other UPI users via their mobile numbers or self-generated QR codes. PhonePe indicates that this initiative aims to establish “full payment interoperability between feature phones and smartphone users” across India.
Emphasizing the potential reach of the UPI solution, PhonePe referred to industry statistics, which indicate there were 240 million feature phone users in 2024. Additionally, the company forecasts that 150 million feature phone shipments will occur over the next five years. “This segment of users has been historically underserved by the digital financial industry and the broader startup ecosystem,” commented Sameer Nigam, Co-Founder and CEO of PhonePe.
