PhonePe launches UPI services for feature phone users in India
What's the story
Fintech giant PhonePe has announced its plan to offer Unified Payments Interface (UPI)-based payments for feature phone users. The move comes after the company's acquisition of GSPay technology stack from Gupshup, a conversational engagement platform. For feature phone users, PhonePe will offer basic capabilities like peer-to-peer transfers and offline QR payments, targeting the largely ignored user base.
Tech acquisition
GSPay is built on UPI 123PAY
GSPay is a mobile app built on UPI 123PAY, the National Payments Corporation of India's (NPCI) UPI payment solution for feature phones. PhonePe plans to customize and extend this recently acquired GSPay intellectual property (IP) and launch its own feature-phone based UPI payment mobile app in India over the next few quarters.
Feature expansion
Interoperability between feature phones and smartphones
The upcoming PhonePe UPI app will offer basic features like P2P transfers, offline QR payments, and the ability to receive money from other UPI users. This will create full payment interoperability between feature phones and smartphones. Sameer Nigam, co-founder and CEO of PhonePe, said that this segment of users has been historically underserved by the digital financial industry and start-up ecosystem.
Market potential
India had around 240 million feature phone users in 2024
Nigam added that they hope to enable crores of feature phone customers to participate in India's growing digital payments market. Industry data shows that India had around 240 million feature phone users in 2024, with another 150 million feature phones expected to be shipped over the next five years. This presents a huge opportunity for PhonePe's new UPI app targeting feature phone users.