Not everyone in India owns a smartphone or has consistent internet access, but that shouldn’t stop anyone from making digital payments. To address this, the National Payments Corporation of India (NPCI), under the guidance of RBI and the Government of India, has introduced two major solutions: UPI 123PAY and *99# (NUUP/USSD service).
Both are designed to empower feature phone users and those in low-connectivity areas, but they work differently. Let’s first understand them individually and then compare them in detail.
What is *99#?
The *99# service is a USSD-based mobile banking solution launched by NPCI in November 2012. It was introduced to bring banking access to every mobile user, especially those without internet or smartphones. By dialing *99#, users can perform basic financial transactions directly from their GSM handsets. Source: NPCI
On 28th August 2014, *99# was dedicated to the nation by the Hon’ble Prime Minister as part of the Pradhan Mantri Jan Dhan Yojana (PMJDY), reinforcing its role in driving financial inclusion.
Evolution of *99#:
Version | Launch | Features | Purpose |
---|---|---|---|
USSD 1.0 | Nov 2012 | Basic mobile banking like balance enquiry, mini statement, fund transfer, MPIN generation. | To provide simple mobile banking without internet. |
USSD 2.0 launched along with BHIM | 30th December 2016 (post UPI launch) | UPI-enabled services such as money transfer, request money, balance check, and setting UPI PIN—all without internet. | To extend UPI access to feature phone & rural users. |
In simple terms:
- *USSD 1.0 = Basic banking via 99# (non-UPI)
- *USSD 2.0 = UPI-powered transactions via 99# (offline UPI)
What is UPI 123PAY?
UPI 123PAY was launched in March 2022 by RBI and NPCI to expand UPI access for non-smartphone users. Unlike *99#, it offers multiple payment modes beyond USSD. Source: RBI
Key Features:
- Interactive Voice Response (IVR) calling.
- App-based functionality for feature phones.
- Missed call payments.
- Proximity sound-based payments.
It aims to make digital payments faster, more reliable, and available without internet.
Difference between UPI 123 AND 99*
1. Origins & Background
*99# (NUUP – USSD Service)
- Introduced in November 2012 by NPCI, initially restricted to MTNL and BSNL.
- Expanded nationally in August 2014, supported under the Pradhan Mantri Jan Dhan Yojana for financial inclusion.
- Built on the National Unified USSD Platform (NUUP), which allows banking transactions over GSM network using USSD codes.
- Available in around 13 Indian languages, making it more accessible to rural users.
- It was India’s first large-scale offline UPI solution.
UPI 123PAY
- Launched on 8 March 2022 by RBI and NPCI.
- Aimed at nearly 40 crore feature phone users in India.
- Designed to overcome the limitations of USSD (*99#).
- Offers four offline payment modes – IVR, missed call, OEM apps, and sound-based proximity payments.
- Supported by major banks and telecom providers, gradually rolled out across India.
2. Technical Mechanisms: How They Work
*99# (USSD 2.0)
- Users dial *99# from any GSM phone.
- Interactive text-based menu appears.
- Options include:
- Send/Receive money using UPI ID, mobile number, or account + IFSC.
- Check balance and last 5 transactions.
- Set/change UPI PIN.
- Entirely menu-driven and text-based, requiring no internet connection.
UPI 123PAY’s Four Offline Methods
- Interactive Voice Response (IVR) – Users can make a secure call to a predefined IVR number, navigate voice prompts (in multiple languages), and complete payments using their UPI PIN.
- Feature Phone App (STK/OEM App) – Certain feature phones come with built-in UPI apps that mimic a smartphone-like interface for UPI tasks.
- Missed Call-Based Payments – Merchants trigger a missed call token, then the user receives a callback to authenticate the transaction with their UPI PIN.
- Proximity Sound-Based Payments – Transactions are facilitated using sound transmission—users tap their phone near a merchant’s device and enter UPI PIN to pay.
3. Transaction Limits & Authentication
*99#
- Per transaction limit: ₹5,000.
- Daily limit: As per the linked bank (generally up to ₹1 lakh).
- Authentication: Always requires UPI PIN.
- Multi-account support: Users can link and manage multiple bank accounts.
UPI 123PAY
- Initially capped at ₹5,000, increased to ₹10,000 per transaction in October 2024. Source: NPCI
- Daily cap: ₹1 lakh. Source: NPCI
- Authentication: Requires UPI PIN (two-factor authentication). Source: NPCI
- Onboarding:
- Debit card + PIN.
4. Accessibility & User Experience
*99#
- Works on any GSM phone, no internet needed
- Supports 13 Indian languages.
- Relies on text navigation.
- Dependent on USSD channel availability.
UPI 123PAY
- Four flexible access modes: IVR, missed call, OEM apps, sound-based.
- IVR supports regional languages for wider inclusivity.
- Sound-based method allows quick tap-to-pay without UI navigation.
- OEM apps give a familiar interface for users shifting from feature to smartphones.
- Challenges: occasional voice input errors and limited bank adoption in some regions
5. Strengths & Limitations
Feature / Aspect | *99# (USSD – NUUP) | UPI 123PAY |
---|---|---|
Launch | 2012–14 (NUUP, USSD 2.0) | March 2022, evolving through 2023–24 |
Modes of Access | 1 (USSD text menu) | 4 (IVR, missed call, OEM app, sound) |
Max per txn limit | ₹5,000 | ₹10,000 (as of Oct 2024) |
Daily limit | Up to ₹1 lakh (bank dependent) | ₹1 lakh (NPCI standard) |
Language Support | 13 languages | Multiple national/regional languages |
User Experience | Text-based, slower navigation | Voice, sound, app-based, faster and flexible |
Limitations | Limited features, slower input | Some technical/bank adoption challenges |