On Monday, PhonePe introduced "UPI 123Pay," a service that allows users without an internet connection to conduct Unified Payments Interface (UPI) transactions. In order to offer the service preinstalled on their handsets, the business has teamed with manufacturers of feature phones, including Nokia, HMD, Lava International, and Itel Mobile.
With this introduction, PhonePe asserts that it is the first significant third-party application provider to give digital payment capabilities to the nation's estimated 200 million non-smartphone consumers.

"Bringing UPI to feature phones through PhonePe UPI 123Pay extends the benefits of digital payments beyond smartphones to every corner of the country," stated Sameer Nigam, CEO and founder of PhonePe.The service uses an SMS-based architecture and a proprietary technology stack to guaranty transaction reliability even in areas with spotty 2G connectivity.According to Nigam, the initiative's goal is to bring the "next 300 million users" into the digital sphere in order to promote financial inclusion.

Peer-to-peer (P2P) transfers and peer-to-merchant (P2M) payments are both possible on the platform.
Additionally, the program allows feature phones with cameras to scan QR codes. Users can also access transaction histories, check balances, and manage accounts.
The company has launched a voice-first, AI-powered helpline to support new users. In English and twelve Indian languages, the assistant offers detailed activation instructions. Future updates, according to the business, would include new features including Aadhaar-based onboarding, recharges, and utility bill payments.  According to PhonePe, there were more than 71.5 crore registered users and more than five crore partners in its merchant network as of July 2026.