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BFSI Chronicle, 11 Edition September 2022
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These transactions will require users to do an transactions due to the phone they use. Considering
Additional Factor of Authentication (AFA). these factors, RBI launched a new digital payment
mode-Unified Payments Interface (UPI) called
As of now, the UPI system is limited to smartphones “UPI123Pay” for feature phones.
with internet connections only. Non-smartphone
users could not take benefit from the UPI system. “UPI 123PAY” will enable “Over 40 crore feature
In fact, smartphone users are also required to have phone users” to access the popular digital transactions
internet connectivity for the same. Thousands platform, without having an internet connection.
of people have not been able to carry out UPI

The launch of UPI 123PAY makes facilities under
UPI accessible to sections of society that were
“so far been excluded from the digital payments
landscape”. In this way, it is promoting a great
amount of Financial Inclusion in our economy. UPI
123PAY requires only a three-step process to initiate
and execute a payment.

Feature phone users will now be able to undertake UPI 123 PAY would allow users to make transactions
a host of transactions based on four technology through UPI via feature phones. The customers will
alternatives. They include be able to use all other features, except the scan and
pay UPI option available for smartphones. The new
 Calling an IVR (Interactive Voice Response) digital payment mode does not need an internet
Number. connection for transactions.

 App functionality in feature phones. How feature phone users will be able to make
payments?
 Missed call-based approach, and also Users of feature phones will be able to make payments
in four ways:
 Proximity sound-based payments.
IVR System: The first mode of making a payment
Such users can initiate payments to friends and is through an IVR System, or a voice-based system,
family, pay utility bills, recharge the FAST Tags of where users can call the number provided by NPCI,
their vehicles, pay mobile bills and also allow users initiate a secured call and make a transaction.
to check account balances, adding customers will also
be able to link bank accounts, set or change UPI PINs. Through a Mobile Application (App): An app would
be installed on the feature phone through which
“Popular UPI payment platforms such as PhonePe, several UPI functions, available on smartphones, will
Google Pay, and Paytm are now more than just also be available on feature phones.
payment tools and transforming into full-stack
financial service providers. This is also in sync with Missed Call mechanism: An option of ‘One missed
the government’s long-term agenda to build start-up call’ is also provided whereby phone users will be
India and Digital India”. able to access their bank account and perform routine

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