Till now UPI is working on smart phones with internet connection, however, a large number of people having feature phones have been unable to do UPI transactions using such phones. RBI has now proposed to add a new feature to UPI which will enable such feature phone users to make payment transactions through USSD. These transactions can be done with text and without the need for an internet connection.
“to deepen” digital payment and to make them more inclusive, make transactions easier for consumers, facilitate greater participation of retail customers in various segments of financial markets and enhance the capacity of service providers, it is proposed to (i) UPI for feature phone users – Launching payment products, leveraging on innovative products from RBI’s regulatory sandbox on retail payments; (ii) streamlining the process flow for small value transactions through a mechanism of ‘on-device’ wallets in UPI applications; and (iii) the transaction limit for payment through UPI has been increased from Rs 2 lakh to Rs 5 lakh for retail direct scheme for investment in G-Sec and Initial Public Offering (IPO) applications,” RBI Governor Shaktikanta Das said.
“India has a large mobile phone subscriber base of around 118 crore mobile users (TRAI, October 2021), of which around 74 crore (Statista, July 2021) have smart phones, indicating that the number of feature phone users in the country There is a large number. Feature phone users have limited access to innovative payment products. However feature phones have NUUP (National Unified USSD Platform) as an option to avail basic payment services using the short code of *99# , but it hasn’t picked up. To deepen financial penetration, it is important to bring feature phone users into mainstream digital payments. In the first group of RBI regulatory sandbox, some innovators have launched feature phones under the theme of ‘retail payments’ had successfully showcased its solutions for payments.These products together with other complimentary solutions, will facilitate UPI-based digital payment solutions on feature phones to promote mass digitization.Proposed to launch UPI-based payment products Have feature phone use Further details for the course will be announced soon,” the RBI statement on development and regulatory policies said.
As UPI has become an important part of the retail digital payment system in India, RBI has decided to add more features to enable people to perform a wide range of transactions. UPI is the largest retail payment system in the country in terms of transaction volume, reflecting its wide acceptance especially for small value payments.
Considering India’s vast geography, a good part of the country still offers very poor internet connectivity. This new text-based feature will enable smartphone users to make payments even in the remotest part of the country. All you need is a phone connectivity to make transactions.
Since Jan Dhan accounts have significantly increased the reach of bank accounts, it has the potential to deliver last mile delivery digital payment transactions.