Forget Smartphones! Make UPI Payment With Keypad Phones Using PhonePe; Here’s How

In a bid to expand the scope of online payment among Indians, digital payments and financial services platform is all set to bring personalised UPI payment facility for feature phones. Once the PhonePe feature becomes active, keypad phone users would also be able to make online payments using PhonePe.

PhonePe on Friday announced an IP purchase of conversational engagement platform Gupshup's proprietary (GSPay) technology stack for enabling UPI-based payments for feature phones.

Make Online Payments Using Keypad Phones

The current online payment feature for keypad phones is yet to become active. Despite the easy availability of smartphones, that too on easy money instalments, a large proportion of Indians continue to opersate keypad phones, which are also known as feature phones.

As per the PhonePe's press release, India had approximately 24 crore feature phone users in 2024, and the number is expected to increase by 15 crore over the next five years.
Bringing the online payment feature for keypad phones would help PhonePe to capture the untapped market of feature phone users.

"This segment of users has been historically underserved by the digital financial industry and the broader startup ecosystem. We hope we can enable crores of these feature phone customers to participate in India's burgeoning digital payments market," said Sameer Nigam, Co-Founder and CEO at PhonePe.

About GSPay Mobile Application

GSPay mobile application has been created with a base of NPCI's UPI payment solution for feature phones (UPI 123Pay). With the IP purchase, PhonePe is now planning to customise and extend the recently acquired GSPay IP and launch its own-feature phone based UPI payment mobile application.

Bangalore-based fintech firm PhonePe is known for its flagship project PhonePe digital payments application. The online payment application will be launched in August 2016. Ever since its inception, the mobile application has a user base of 60 crore and its digital payments network is spread across over 4 crore merchants.
Apart from digital payment, PhonePe also operates into other consumer tech segments like e-commerce service provider (with Hyperlocal). Additionally, it also provides financial produces like insurance, lending and wealth.

Feature Phones in India

While a decent number of individuals continue to use feature phones in India, the popularity of these keypad phones has declined significantly over the past few years. The gradual shutdown of 2G networks and the increasing availability of affordable 4G and 5G smartphones are key factors in their declining popularity. However, keypad phones continue to be an affordable option for low-income families.

A CMR report for the December quarter revealed a significant drop in feature phone sales. The 2G category decreased by 22% year-on-year, while the 4G category fell by 59%. All major vendors like iTel, Lava, HMD, Karbonn, and Cellecor experienced sharp declines in volumes.

Despite declining popularity of the section, several telecom giants have launched new products under the category. Reliance Jio in 2023 launched JioBharat 4G keypad phone at under Rs 1,000 in July 2023.