General Studies IIIEconomyRBI



The Reserve Bank of India has recently launched two key initiatives named UPI123Pay- Option to make Unified Payments Interface (UPI) payments for feature phone users, and DigiSaathi – a 24×7 Helpline.

What is UPI123Pay?

  • UPI ‘123PAY’ is a three-step method to initiate and execute services for users which will work on simple phones.
  • It will allow customers to use feature phones for almost all transactions except scan and pay.
  • It doesn’t need an internet connection for transactions. Customers have to link their bank account with feature phones to use this facility.
  • Feature phone users will now be able to undertake a host of transactions based on four technology alternatives.
  • They include:
  • App-based Functionality: An app would be installed on the feature phone through which several UPI functions, available on smartphones, will also be available on feature phones.
  • Missed Call: This will allow feature phone users to access their bank account and perform routine transactions such as receiving, transferring funds, regular purchases, bill payments, etc., by giving a missed call on the number displayed at the merchant outlet. The customer will receive an incoming call to authenticate the transaction by entering UPI PIN.
  • Interactive Voice Response (IVR): UPI payment through pre-defined IVR numbers would require users to initiate a secured call from their feature phones to a predetermined number and complete UPI on-boarding formalities to be able to start making financial transactions without internet connection.
  • Proximity Sound-based Payments: This uses sound waves to enable contactless, offline, and proximity data communication on any device.
  • Hence UPI for feature phones, i.e., UPI123Pay is a three-step process – call, choose and pay.
  • The feature phone user will be required to call on the IVR number and select the phone depending on the service required such as money transfer, LPG gas refill, FasTag recharge, mobile recharge, balance check etc.
  • To transfer money, one will have to select the phone number of the person to whom money is to be transferred, enter the amount and UPI PIN.
  • To pay a merchant, he can use an app based payment method or missed call payment method.
  • He/she can also use voice based methods to make the digital payments.
  • The availability of the service on feature phones without an internet connection could help it penetrate into rural areas of the country, enhancing financial inclusion and digital adoption, while also driving payments’ volumes on the platform.
  • Such users can initiate payments to friends and family, pay utility bills, recharge the FAST Tags of their vehicles, pay mobile bills and also allow users to check account balances.
  • Customers will also be able to link bank accounts, set or change UPI PINs.

24×7 Helpline – ‘DigiSaathi’-

  • It provides a channel to obtain help on the entire gamut of digital payments. 
  • DigiSaathi will assist users with their queries on digital payments via website & chatbot facility and through toll-free calls where users can dial or call out the options / products for which the information is required.
  • Automated responses on information related to digital payment products and services are available in Hindi and English through multiple options.

Why UPI123Pay was created?

  • UPI, which was introduced in 2016, has become one of the most used digital payments platforms in the country.
  • The volume of UPI transactions has already reached ₹76 lakh crore in the current year, compared to ₹41 lakh crore in FY21.
  • However, at present, efficient access to UPI is available largely via smartphones.

How do UPI payments through sound work?

  • UPI payments using sound isn’t new. When Google Pay was first launched in 2017 as Tez, the app had a sound-based system of payments built in.
  • Google called this ‘Cash Mode’ in which phones would emit ultrasonic sounds that could be used by other Tez users to accept and receive money.
  • It’s somewhat like Bluetooth but instead of using radio waves, it uses sound waves to transfer data from one device to the next.
  • A company called ToneTag also produces audio-based point-of-sale machines.

Is payment through sound secure?

  • Sound wave-based payments are meant to be contactless, but occur within a certain proximity only.
  • Ultrasonic waves are outside the usual human hearing range, but such payment systems can also use audible sounds, something that US-based startup Chirp showcased back in 2011.
  • Devices using such systems are encrypted, and only the devices involved can recognize the emitted waves.
  • The sound waves being emitted are encrypted, meaning the receiving device will need to have decryption codes to complete the transaction.

Unified Payments Interface (UPI)-

  • UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. 
  • It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.
  • The interface is regulated by the RBI and works by instantly transferring funds between two bank accounts on a mobile platform.
  • In India, it is owned and developed by National Payments Corporation of India (NPCI). 
  • NPCI conducted a pilot launch with 21 member banks in 2016.

Source:  Indian Express

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