Feature phones will soon allow users to make UPI payments as per the latest measure announced by the Reserve Bank of India (RBI). Earlier this week, RBI Governor Shaktikanta Das announced the launch of digital payment systems for feature phones. Feature phones are not smartphones and serve basic functions like making calls and sending text messages. Das also announced to enhance the transaction limit to Rs 5 lakh from Rs 2 lakh for UPI payments for RBI’s Retail Direct scheme.

Das noted that UPI is the single largest retail payment system in the country in terms of volume of transactions indicating its wide acceptance, particularly for small value payments. He then announced three proposals to further deepen digital payments and make them more inclusive. The first proposal was to launch UPI-based payment products for feature phone users.

The second proposal was to make the process flow for small value transactions simple through a mechanism of on-device wallet in UPI applications. The third proposal was to enhance the transaction limit for payments through UPI for the Retail Direct Scheme for investment in G-secs and Initial Public Offering (IPO) applications from Rs 2 lakh to Rs 5 lakh.

As per the NPCI data for November 2021, UPI transactions crossed the $100 Billion value mark for the first time. As per TRAI data, India has over 300 million feature phone users, who will be able to avail of UPI-based services, once the service goes live.

As of now, there are no native UPI apps through which feature phone users can make UPI transactions. It is only possible for feature phones or non-internet-based mobile devices to make payments through the National Unified USSD Platform (NUUP). Users are required to dial *99# and make transactions through an interactive menu on their mobile phones. This method has not picked up because of which UPI payments will be launched soon.

In its statement on developmental and regulatory policies released post the meeting of its Monetary Policy Committee,

After the meeting of its Monetary Policy Committee, RBI in a separate statement said that some innovators had successfully demonstrated their solutions for feature phone payments, under the theme of ‘Retail Payments’. “These products, coupled with other complementary solutions, will facilitate UPI-based digital payment solutions on feature phones to promote wider digitisation,” it said.