The RBI governor Shaktikanta Das announced that UPI-based payment products will be launched for feature phone users. The Governor also enhanced the transaction limit to Rs 5 lakh from Rs 2 lakh for UPI payments for RBI's Retail Direct scheme and IPO offering applications. RBI's Retail Direct scheme facilitates investment by individuals into government securities by opening a gilt securities account with the central bank. [1]

Figure 1. UPI-Based Payments Products to be Launched for Feature Phone Users: RBI

Figure 1 shows india has a large mobile phone consumer base of about 118 crore users (TRAI, October 2021). Of this, a significant number of users are still on feature phones. As per Statista, July 2021, about 74 crore users have smart phones.

However, feature phone users have limited access to innovative payment products. Although such phones have NUUP (National Unified USSD Platform) as an option for availing basic payment services using the short code of *99#, the same has not picked up.

To deepen financial penetration, RBI Governor Shaktikanta Das said it is important to bring feature phone users into the mainstream digital payments. In the first cohort of RBI Regulatory Sandbox, some innovators had successfully demonstrated their solutions for feature phone payments, under the theme of ''Retail Payments''. [2]

NPCI Data

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. [3]

References:

1. https://economictimes.indiatimes.com/industry/banking/finance/upi-based-payment-products-to-be-launched-for-feature-phone-users-rbi/articleshow/88158277.cms
2. https://www.ndtv.com/business/upi-based-payments-products-to-be-launched-for-feature-phone-users-reserve-bank-of-india-rbi-2643052
3. https://www.indiatoday.in/technology/news/story/feature-phones-will-soon-get-upi-based-payment-support-rbi-says-it-will-deepen-digital-payments-1887219-2021-12-13

Cite this article:

Thanusri swetha J (2022), UPI-Based Payments Products to be Launched for Feature Phone Users: RBI, pp. 59