With an aim to increase digital transactions in the country, the Reserve Bank Of India has announced a payment feature of features phones. Currently, all-digital transactions can be done via smartphone users and feature phones are known for making calls and sending messages.
Notably, the apex bank in its “Statement on Developmental and Regulatory Practices”, has proposed this new feature for the feature phones. However, the bank is yet to issue details about the same services.
“These products, coupled with other complementary solutions, will facilitate UPI-based digital payment solutions on feature phones to promote wide digitization. It is proposed to launch a UPI-based payment product for feature phone users. Further details will be announced shortly,” RBI Governor Shaktikanta Das was quoted by PTI.
“As part of the transition from LIBOR, we also look forward to the guidelines on the use of interbank rate or alternative reference rate (ARR) as benchmarks for ECB/Trade Credit,” Shankar further added.
He said that it is important to bring UPI payments to feature phone users as 44 crore users are still using the same platform out of 118 crore mobile users in the country. According to Statista this year close to 74 crores of users are using smartphones in India.
As per the RBI statement, “UPI is the single largest retail payment system in the country in terms of volume of transactions (14 crore transactions per day, October 2021). One of the initial objectives of UPI was to replace cash for low value transactions. Transaction data analysis shows that 50 percent of transactions through UPI were below RS. 200, indicating its success. These low value transactions, however, utilise significant system capacity and resources, at times leading to customer inconvenience due to transaction failures because of issues related to connectivity.”
Mobile Banking Launched In 2012
It is worth noting that the National Payments Corporation of India launched USSD a mobile baking service called *99#. For the uninitiated, the services were launched by BSNL and MTNL. In 2016, the Indian Government introduced BHIM, which actually increased digital transactions in India.
In fact, some report claims that 2017-18 USSD 2.0 transactions managed to get 4.3 percent of the UPI volumes and 1.6 percent of the entire value. However, last year was not good the share has been decreased to 0.005 percent respectively.
