PhonePe non‑internet UPI payment now available for feature phones

PhonePe non‑internet UPI payment is making UPI accessible to feature phone users through SMS, IVR, QR codes, and voice—thanks to the acquisition of Gupshup’s GSPay, built on NPCI’s UPI 123PAY. This move aims to empower 240 million feature phone users and expand financial inclusion.

Summary

PhonePe has acquired the GSPay IP from Gupshup to enable phonepe non‑internet UPI payment for feature phones. The service, based on NPCI’s UPI 123PAY, will allow peer-to-peer transfers, offline QR scanning, and money reception—all without internet. Targeting a user base of around 240 million (with ~150 million more expected in five years), the initiative aims to bridge the urban-rural digital payment divide.

Background: Why this matters

Despite widespread internet penetration, a significant portion of India—estimated at 24 crore feature phone users—remains outside the digital payments bubble.

• UPI to date: Traditionally available only via smartphone apps or USSD (*99#). UPI 123PAY, launched by NPCI in March 2022, pioneered access via voice, QR, and missed calls.
• The gap: Feature phone users often lack access to apps or reliable connectivity in semi-urban and rural regions.
• PhonePe’s role: As a key player in India’s fintech ecosystem, PhonePe processes millions of transactions daily using UPI, mobile wallets, and prepaid services.

What PhonePe’s solution offers

PhonePe is adapting the acquired GSPay platform to integrate with NPCI’s UPI 123PAY suite — SMS/IVR, missed-call, QR, and proximity transactions.

Key features:

• Peer-to-peer transfers: Send money to any UPI ID or mobile number.
• Offline QR payments: Scan printed QR codes using camera-less feature phones.
• Receive funds: Others can transfer money to your UPI ID or self-generated QR.
• Multi-channel access:
  • IVR (Voice-based interaction)
  • SMS triggers
  • Missed-call authentication
  • Sound-based proximity transfers
• USSD compatibility: Works seamlessly with *99# banking.

PhonePe aims for full interoperability between feature phones and smartphones, ensuring universal access across devices.

Scale & adoption potential

• User base: ~24 crore feature phone users in India (2024).
• Growth forecast: Additional ~15 crore feature phone shipments expected over next five years.
• Fintech gap: Historically, feature phone users have been underserved by digital finance and startup ecosystems.
• PhonePe’s scale: As of April 2025, PhonePe has 600 million users, processes 330 million transactions daily, and handles ~₹150 lakh crore in annual TPV.

Implications for stakeholders

For feature phone users:

• Access UPI payments—send/receive, pay bills—without needing a smartphone or data.
• Vital in rural areas where internet connectivity is unreliable.
• Empowers small businesses and laborers to participate in the digital economy.

For financial inclusion:

• A major step in democratizing banking access.
• Enables government welfare, micro-credit, and rural commerce to reach more beneficiaries.

For PhonePe:

• Strengthens its ecosystem by tapping into a huge untapped base.
• Fills a key inclusion gap ahead of its IPO—showing innovation beyond urban users.

For the broader fintech ecosystem:

• Sets a precedent for competing players to develop non-internet UPI options.
• Accelerates national goals to universalize digital payments via UPI.

What PhonePe says: Voice from the CEO

Sameer Nigam, CEO of PhonePe, emphasized:

“We are excited about acquiring the GSPay technology stack and using it to bring UPI payments to India’s extensive feature phone user base. This segment […] has been historically underserved […]. We hope we can enable crores of these feature phone customers to participate in India’s burgeoning digital payments market.”

He highlighted the plan to launch a feature-phone UPI app within the next few months, customized for low-connectivity and usability.

Timeline & rollout

• Now: Acquisition of GSPay IP completed; development underway.
• Next few quarters: Phased pilot launches—targeting semi-urban and rural markets.
• Long-term: Pre-installation on new feature phones; possible collaboration with manufacturers.
• Steady compliance: Full NPCI certification for secure, interoperable UPI.

Final thoughts

PhonePe’s non-internet UPI payment leveraging GSPay is a monumental leap toward financial inclusion. By enabling UPI on feature phones, it bridges the digital divide in rural India and reimagines who can transact digitally. With strong infrastructure, existing user base, and thoughtful implementation, PhonePe is well-positioned to drive a new wave of digital adoption—showcasing innovation that transcends urban confines. Expect this move to catalyze both policy momentum and industry response, propelling India toward full financial inclusion.

Further reading & resources

• NPCI UPI 123PAY overview(en.wikipedia.org)
• PhonePe acquisition press release(phonepe.com)

FAQs

1. How does PhonePe non‑internet UPI payment work on feature phones?
   It uses GSPay + UPI 123PAY to enable options like SMS, IVR, missed call, and QR/voice transfers—no data needed.
2. What is UPI 123PAY?
   An NPCI initiative (since Mar 2022) allowing feature phones to use UPI via voice, missed call, SMS, and sound modes(timesbull.com, bizzbuzz.news).
3. Which UPI features are supported?
   Peer-to-peer transfers, offline QR code scanning, money reception, and USSD (*99#) banking.
4. When will this rollout begin?
   PhonePe plans phased deployment over the next few quarters, starting regionally and scaling nationally.
5. Who benefits most from this?
   Rural populations, micro-businesses, laborers, and financially underserved feature phone users lacking access to smartphones or data.