What is UPI123Pay?

The Reserve Bank of India last month, in collaboration with the National Payments Corporation of India, launched the Unified Payment Interface (UPI) for feature phone users known as UPI 123Pay.

UPI can, in fact, can be used on feature phones even currently, but the process is USSD based. It can be accessed through NUUP (National Unified USSD Platform) using the short code of *99#. But this option is cumbersome and remains unpopular.

Considering that there are more than 400 million feature phone users in India, UPI 123pay will materially improve the options for such users to access UPI.

Feature phone users will now be able to undertake a host of transactions based on four technology alternatives.

They include calling an IVR number, app-based functionality in feature phones, missed call-based approach and also proximity sound-based payments. Let’s go through each option.

UPI payment through pre-defined IVR numbers would require users to initiate a secured call from their feature phones to a predetermined number and complete UPI on-boarding formalities to be able to start making financial transactions without an internet connection.

With the IVR providing multiple language options, customers can avail this service in their preferred languages.

In app-based functionality, an app would be installed on the feature phone through which the user can access several UPI functions. In this type, the interested solution providers will need to partner with the feature phone mobile manufacturers to enable a native payment app.

This UPI app’s look and feel is similar to smartphone-based apps, however with certain limitations of the feature phone.

Currently, it can offer the majority of UPI functionality except for Scan and Pay, which is a work in progress.

In a missed call-based approach, feature phone users can access their bank account and perform routine transactions such as receiving and transferring funds, regular purchases, bill payments, etc., by giving a missed call on the number displayed at the merchant outlet.

At the time of billing, the merchant will create a token with the customer’s mobile number and the bill amount of his purchase. The customer will receive an incoming call to authenticate the transaction by entering UPI PIN.

And last but not least, Proximity Sound-based Payment uses sound waves to enable contactless, offline, and proximity data communication on any device. Users can tap any phone and make UPI payments to merchants using a payment solution developed by ToneTag.

The user first calls the IVR number and chooses the Pay to Merchant option. They tap their mobile phone on the merchant device, and press # once the device emits the unique tone.

The user then enters the amount to pay, followed by their UPI PIN to complete the transaction. The merchant device acknowledges the transaction status and the user receives confirmation through the IVR call.

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