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The Reserve Bank of India (RBI) on Tuesday introduced UPI123Pay, a new system for digital payments using the Unified Payments Interface (UPI). This is meant for feature phones, and will work without internet. Mint explains how:

What’s the new system for digital payments?

At the moment, payments made through UPI on smartphones depend on the availability of Internet, cameras, and more. That may not always be the case for feature  phone  users,  and  UPI123Pay aims to solve that problem by offering payments via interactive voice response (IVR) numbers, feature phone apps, missed calls, and sound-based payments. RBI also announced the roll-out of a 24x7 helpline for digital payments, which it calls DigiSaathi. The entire infrastructure is supposed to help bring digital payments to the large section of Indian mobile phone users who still carry feature phones.

How many feature phone users are there?

According to August 2021 data from Counterpoint Research, India had a considerable installed base of 320 million feature phone users. In comparison, a February report by Deloitte said the country had around 750 million smartphone users, out of a total of 1.2 billion mobile phone subscribers in 2021. Operators like Jio have made devices like the JioPhone Next, which aim to bring feature phone users to smartphones, but experts have often pointed out that despite the availability of cheap smartphones in the country, they are not affordable enough to make them attractive for feature phone users.

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Was UPI available on feature phones before?

Yes, UPI availability on feature phones isn’t new. However, the earlier system used the Unstructured Supplementary Service Data (USSD) method, which hasn’t seen the same level of adoption as QR code-based payments. Feature phone users can dial *99# to make UPI payments, but users found the system cumbersome and many worried  about  the  possibility  of  SMS  charges.

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.

 

 

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