UPI on a feature phone: What works, what doesn't and how safe is it?

UPI has become a part of everyday life for millions of Indians. But for many feature-phone users, making a digital payment has still meant relying on a smartphone and an internet connection. That is now beginning to change.

PhonePe has launched UPI 123Pay, a service that allows feature-phone users to make UPI payments without an internet connection. The service is aimed at more than 200 million feature-phone users in India.

How does UPI work without internet?

UPI 123Pay uses an SMS-based architecture to process transactions, allowing users to make payments without mobile data. PhonePe said the system is designed to work reliably even in areas with limited 2G connectivity.

The service will be pre-bundled on select devices from handset makers including Nokia, HMD, Lava International and Itel Mobile.

“Bringing UPI to feature phones through PhonePe UPI 123Pay extends the benefits of digital payments beyond smartphones to every corner of the country,” Sameer Nigam, founder and CEO of PhonePe, said.

Nigam said the initiative is aimed at bringing the “next 300 million users” into the digital payments ecosystem.

What can users do?

Feature-phone users can make both person-to-person and merchant payments through the service.

They can send money using a mobile number or UPI ID, check their bank balance and view transaction history.

Users with camera-enabled feature phones can also scan QR codes to make payments.

PhonePe said around 40% of feature phones have cameras, meaning QR-based payments will not be available on every handset.

The company plans to add utility bill payments, mobile recharges and Aadhaar-based onboarding in future updates.

Is mobile data required?

No. One of the key features of UPI 123Pay is that users do not need an internet connection to make transactions.

The SMS-based system is designed to allow payments even where mobile data is unavailable or connectivity is weak.

This could make UPI more accessible to people who use basic phones or live in areas with limited internet connectivity.

How will first-time users get help?

PhonePe has introduced a voice-first, AI-powered helpline to help users activate and use the service.

The assistant provides step-by-step guidance in English and 12 Indian languages, which could make it easier for first-time digital-payment users to get started.

What about security?

Users still need to authenticate UPI transactions using their UPI PIN. The basic precautions remain the same as with smartphone-based UPI.

Users should never share their UPI PIN, OTP or banking credentials with anyone and should check the recipient's details before approving a transaction.

The feature-phone push comes as UPI continues to see rapid growth. NPCI data released on September 1 showed that UPI transactions reached a record 24.51 billion in August 2026, up from 23.66 billion in July.

The value of transactions stood at ₹29.82 lakh crore in August, compared with ₹24.85 lakh crore a year earlier, representing a 20% increase.

UPI transaction value had touched a record ₹29.9 lakh crore in both May and July.

The latest move takes UPI beyond the smartphone ecosystem and towards users who may not have access to mobile internet.

What users can do, however, will depend on their handset, particularly whether it has a camera for QR-code payments.