The Unified Payments Interface (UPI) has gained immense popularity in the last five years in India. Especially during the Covid-19 pandemic, it served as a go-to payment option for smartphone owners. According to the National Payments Corporation of India (NPCI), UPI transactions have consistently increased every month.
According to recent data, there are 304 banks living on the UPI system, and collectively 4,527.29 million transactions took place in February 2022. In total, Rs 8.26 lakh crore worth of transactions were done via UPI last month. Still, a large portion of India’s population could not use UPI as one needed a smartphone for the same. To fill the gap, the Reserve Bank of India (RBI) announced a new payment system, 123PAY, that can be used by feature phone owners.
According to RBI, 123PAY would help India to attain its goal of a cashless economy. Shaktikanta Das, Governor, RBI, launched the payment system at a special RBI event. He said the new platform would help UPI facilitate the section of the society that was so far excluded from the digital payments landscape. It will help in the financial inclusion of that section of the society in the digital payments ecosystem.
NPCI has a goal of a billion UPI transactions per day in the coming months. The new system will alone help 40 crore feature phone owners to connect to the UPI system. The governor also launched a helpline for digital payments named “DigiSaathi” along with 123PAY.
How 123PAY works
Earlier, feature phone owners were able to make digital payments but only via USSD by dialling *99# and following the numeric interface presented by the banking system. Notably, the system often caused problems and was limited to few mobile operators. The new 123PAY system will fill this gap with the help of four technologies, as explained during the launch. The four technologies are Interactive voice response or IVR, apps in feature phones, missed call-based payments, and proximity sound-based payments.
The IVR System
In the IVR system, the users have to dial the number 08045163666 from the phone that is connected to their bank account. OpIndia tried a hands-on IVR system to see how it works. When you dial the number, it gives you an option to choose the language. Once the language is selected, it will give you the option to connect the bank account to the 123PAY system. IDFC Bank is the partner bank in 123PAY.
IVR will ask you to say the name of the bank in which you have the bank account linked to your mobile number. It will confirm the bank name and then proceed to check the account number. Once it has located the account number, it will tell the last two digits of the bank account and the name of the account holder. It will ask you if you want to connect it to the UPI system.
Once you have selected the option, it will ask you to create a UPI PIN. Once it is done, the system will send you the newly generated UPI ID. In our case, the PIN already existed, so it asked us to select what we wanted to do next. The options available include fund transfer, check balance, deregister bank account, deregister UPI, change UPI PIN, make EMI payments, make utility payments and more.
Missed call system
There are two options in this system, and it will be used majorly by the merchants. In this case, you need to give a missed call to the number provided by the merchant, and you will receive a call back to make the payment. There is also an option of sound-based payments where the system will recognize the sound from a device at the merchant and initiate contactless payment from the user’s phone.
Initially, 123PAY is available in Hindi and English, but later, local languages will be added to the system. RBI has also launched dedicated 24×7 helpline numbers 14421 and 18008913333.
