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UPI payment system for feature phone users

The Unified Payment Interface (UPI) has gained immense popularity over the past five years in India. Especially during the Covid-19 pandemic, it served as a go-to payment option for smartphone owners. According to the National Payments Corporation of India (NPCI), UPI transactions have been steadily increasing every month.

According to recent data, 304 banks live on the UPI system and collectively 4,527.29 million transactions took place in February 2022. In total, transactions worth Rs 8.26 lakh crore were conducted via UPI last month. Yet, a large portion of the Indian population could not use UPI as it required a smartphone for the same. To fill the void, the Reserve Bank of India (RBI) has announced a new payment system, 123PAY, which can be used by owners of feature phones.

According to RBI, 123PAY would help India achieve its goal of a cashless economy. Shaktikanta Das, Governor, RBI, launched the payment system at a special RBI event. He said the new platform would help UPI facilitate the part of society that has been left out of the digital payments landscape until now. This will contribute to the financial inclusion of this part of society in the digital payments ecosystem.

NPCI has a goal of one billion UPI transactions per day in the coming months. The new system alone will help 40 crores of phone owners connect to the UPI system. The Governor has also launched a digital payments hotline called “DigiSaathi” with 123PAY.

How 123PAY works

Previously, feature phone owners could make digital payments, but only via USSD by dialing *99# and following the digital interface presented by the banking system. Notably, the system often caused problems and was limited to a few mobile operators. The new 123PAY system will fill this gap using four technologies, as explained at the launch. The four technologies are interactive voice response or IVR, applications in feature phones, payments based on missed calls, and payments based on proximity sound.

The IVR system

In the IVR system, users need to dial 08045163666 from the phone connected to their bank account. OpIndia has tried a handy IVR system to see how it works. When you dial the number, you have the option to choose the language. Once the language is selected, you will have the possibility to connect the bank account to the 123PAY system. IDFC Bank is the partner bank of 123PAY.

Screenshot of messages received while interacting with the UPI 123PAY system.

IVR will ask you to say the name of the bank in which you have the bank account linked to your mobile number. It will confirm the name of the bank and then proceed to verify the account number. Once it locates the account number, it will show the last two digits of the bank account and the name of the account holder. It will ask you if you want to connect it to the UPI system.

Once you select the option, you will be asked to create a UPI PIN. Once done, the system will send you the newly generated UPI ID. In our case, the PIN already existed, so it asked us to select what we wanted to do next. Available options include fund transfer, balance check, bank account unsubscribe, UPI unsubscribe, change UPI PIN, EMI payments, utility payments, and more.

Missed call system

There are two options in this system, and it will mainly be used by traders. In this case, you must give a missed call to the number provided by the merchant, and you will be called back to make the payment. There is also an option of sound-based payments where the system will recognize the sound of a device at the merchant and initiate contactless payment from the user’s phone.

Initially, 123PAY is available in Hindi and English, but later local languages ​​will be added to the system. RBI has also launched dedicated 24×7 helpline numbers 14421 and 18008913333.