itel has announced a partnership with digital payments platform PhonePe to introduce UPI capabilities to feature phone users across India.
Through this collaboration, PhonePe’s UPI 123Pay will come pre-bundled on select itel feature phones, allowing consumers to carry out digital financial transactions without needing a smartphone or active internet access. This follows recent announcements from HMD and Lava.
The initiative is designed to address connectivity and device barriers in rural and semi-urban markets, where data coverage can be inconsistent and smartphone penetration remains lower than in metropolitan areas. By embedding digital transaction capabilities into basic handsets, the two companies aim to broaden financial inclusion for non-smartphone users.
Core Features and Registration
Under the arrangement, compatible itel devices will ship with a dedicated PhonePe application pre-installed. The integration supports standard digital payment functions, including
- P2P Transfers: Peer-to-peer money transfers sent directly via mobile numbers or UPI IDs.
- Merchant Transactions: Direct merchant payments completed through UPI IDs or scanning-compatible workflows.
- Account Management: On-device bank balance inquiries and transaction history reviews.
The onboarding process requires users to launch the pre-installed application, link their respective bank account, verify identity using debit card details, and establish a UPI PIN. Once configured, users can initiate transactions directly from their handset.
Market Context
While Unified Payments Interface (UPI) volumes have grown rapidly across India, usage has historically been concentrated on smartphones with steady data connections. Solutions like UPI 123Pay leverage alternative communication channels to process transactions natively on entry-level hardware.
For itel, which holds a substantial distribution footprint across Tier 2, Tier 3, Tier 4, and rural markets, the integration aligns with its focus on basic hardware accessibility. For PhonePe, the partnership provides a distribution channel to onboard consumers who have not yet transitioned to internet-enabled devices into the digital payments ecosystem.
Commenting on the partnership, Arijit Talapatra, CEO, itel India, said:
At itel, our focus has always been on making technology accessible and useful for every Indian, especially consumers in smaller towns, rural markets and communities that are often underserved by the latest digital solutions. Our partnership with PhonePe is a natural extension of this commitment. By bringing UPI payments to our feature phones, we are making digital payments simpler and more accessible for millions of consumers who may not use smartphones or have no regular access to the internet. We believe this collaboration will help bring more people into India’s growing digital payments ecosystem.
Regarding the launch, Sameer Nigam, Founder and CEO, PhonePe, said:
Over the last decade, UPI has completely transformed how India pays–a journey PhonePe is proud to have built alongside it from day one. As we reflect on how far we have come, the logical next step is expanding the horizon even further and unlocking what’s next. Bringing UPI to feature phones through PhonePe UPI 123Pay extends the benefits of digital payments beyond smartphones to every corner of the country. To us, this is what building for India actually means- meeting people where they are to drive a truly universal wave of financial inclusion that will onboard the next 300 million users into the digital financial fold.