Undoubtedly one of the biggest news last year in the world of digital payments was the announcement of UPI 123Pay. As the extension of RBI-enabled UPI 2.0, it created an alternative for feature phone users to become a part of the growing digital landscape. In the age of smartphones, it might come as a surprise but there are close to 40 crore Indians who still continue to use feature phones and thus RBI’s decision to introduce a feature independent of what kind of phone you use or the internet connectivity. 

Users of feature phones can use one of four different approaches with 123PAY to perform a variety of digital transactions. It includes contacting the IVR (interactive voice response), by feature phone-based app, through missed call or by using a proximity sound payment method. In addition, this service is available in many regional languages apart from Hindi and English, making it more accessible to regions where these two dominant languages are missing. This has significantly helped increase the number of users, particularly in rural areas where most of the population speaks regional languages.

UPI 123Pay mechanism for feature phones 

To use UPI 123Pay, the customer simply needs to link their bank account to the service. Post verification, there are four ways through which a customer can then initiate the required digital transactions as follows:

Missed calls

Whether it is the payment of utility bills or payments at neighbourhood kirana stores, you just need to give a missed call on the common number.  The customer then automatically receives a call back to authenticate the desired transaction by entering the UPI PIN. 

Also Read: UPI payment charges for bank account-to-account money transfer from April 1: It’s free!

UPI App

For this method, an app needs to be installed on the customer’s phone that will enable the transfer except “scan and pay” functionality. The app is specifically designed for feature phones to make online payments like Fastag, LPG payments, Electricity bills etc. 

IVR (Interactive Voice Response)

To proceed with any kind of payment through IVR, the customer needs to call on a pre-determined phone number. Post-UPI PIN authentication, the customer will be able to go ahead with desired financial transactions simply by pressing the digits on the phone as per instruction. ToneTag voice-based solution VoiceSe offered the services on the same lines, enabling users to pay utility bills, fund transfers, and recharge among others.

Proximity sound payments

To enable contactless, offline, and close-proximity data transfer on any device, this technique uses sound waves. The technology underlying it permits payments on a variety of devices, including smartphones, feature phones, card swipe machines, and point-of-sale devices, and is not dependent on any one platform. 

Now that we have established that digital payments through UPI 123Pay are independent of the phone type or internet connectivity, it does open a plethora of opportunities, especially for the segments that have abstained from digital transformation due to the lack of tech and digital prowess. For instance, Bharat Gas (BPCL) shared; post the launch of UPI 123Pay for cylinder bookings and payment, they experienced over 13,000 Bharatgas clients that used 123Pay and made transactions totalling more than 1 cr, which suggests that transactions worth Rs. 100 Crore could be anticipated over the course of the following 12 months.

Also Read: UPI payment for international travellers visiting Delhi, Mumbai, Bengaluru airports – Details

UPI 123Pay is particularly useful for making transitions in scenarios where the receiver’s UPI ID is not known such as gas booking, ticket booking and other transactions. When you book gas cylinders, you usually have to provide your distributor’s UPI ID to make the payment. With UPI 123, you can make the payment without having to share the UPI ID. You can simply enter the distributor’s bank account number and IFSC code, and the payment will be processed through UPI or give a missed call on the number provided by the gas provider. This makes the payment process faster and more secure. The same goes for ticket booking and banking transactions.

Summing up 

Due to widespread access to inexpensive internet and smartphones, UPI transactions have kept on expanding in India. UPI volumes touched Rs 76 lakh crores in FY 22 from Rs.41 lakh crores in FY 21. Even with such deep penetration of digital payments, a majority of the population could not access this tech advancement due to two main reasons. One is the lack of internet connectivity and other being the limited access to smartphones amongst non-urban population.

UPI 123Pay aims to make digital payments simpler and more accessible to a wider audience. Overall, it could be a game-changer in the digital payments space in India. Its ease of use, increased security, interoperability, and incentives make it an attractive option for both users and merchants. As more people adopt UPI 123Pay, we can expect to see a dramatic shift towards digital payments in India.

(By Sudeshna Singh – Head Marketing & Communication, ToneTag. Views expressed above are personal)