No Indian Left Behind
UCO Bank Story

Merchant Onboarding with QR and Sound Box

In alignment with India’s Digital Economy vision, UCO Bank’s “Merchant Onboarding with Merchant QR and Sound Box” project represents a significant leap toward enhancing financial inclusion and digital payment penetration.

Launched in August 2022, the initiative aims to simplify and scale digital transactions by empowering merchants across urban and rural geographies with easy-to-use QR codes and sound-enabled confirmation systems.

Context and Challenges Addressed

The core problem that UCO Bank sought to tackle was the low penetration of digital payments among merchants, especially those operating in cash-dominated economies. Many merchants, particularly in rural or semi-urban areas, lacked the technological tools or literacy required for adopting complex payment systems.

This initiative was aimed at solving following challenges:

• Accessibility – Empowering merchants with easy-to-use, affordable QR codes for accepting digital payments.
• Payment Transparency – SoundBoxes offer instant transaction confirmation, building trust between
  customers and merchants.
• Customer Convenience – Enabling faster, seamless payments improves satisfaction and repeat business.
• Financial Inclusion – Extending digital infrastructure to small and rural merchants helps integrate them into the formal financial ecosystem.

Design and Implementation

By leveraging Fintechs, UCO Bank has developed tailored solution by integrating QR codes with SoundBox devices, which confirm payment success audibly. These SoundBoxes support 11 languages, making them usable across India’s linguistically diverse regions. The QR codes support UPI, credit cards and wallets—ensuring broad compatibility with customer preferences.

Implementation was phased:

• Planning and Empanelment – UCO Bank evaluated fintechs providers and formalised the partnership with Futuretek.
• Design and Integration – Customisation of the solution and integration with UCO Bank’s core infrastructure, including app sliders and merchant notifications.
• Pilot Testing – Training select merchants, collecting feedback and refining features.
• Full-Scale Rollout – Expansion to additional regions with a robust support system and marketing campaigns.
• Post-Implementation Review – Data-driven evaluation of performance, feedback assimilation and
  planning for scalability.

Tangible Impact and Results

The initiative has delivered notable outcomes across multiple metrics:

• 93,000+ merchants onboarded with QR codes, including many in remote areas.
• 61,000+ SoundBoxes deployed, improving transaction transparency and reducing payment disputes.
• Merchant QR penetration among UCO current account holders rose from 2% in March 2023 to 22% in March 2025.
• SoundBox usage increased from 1% to 14% in the same period.
• The project helped grow the bank’s CASA (Current and Savings Account) balances from ₹500 crore to ₹969 crore.
• UCO Bank witnessed a 68% year-on-year growth in digital transactions.

The bank also saw a 34% increase in balances from accounts onboarded with QR and SoundBox from March 2024 to March 2025 alone—highlighting the solution’s financial impact.

UPI 123Pay – Bridging the Digital Divide

UCO Bank’s UPI 123 Payments System is aimed at transforming the digital payments landscape by extending UPI services to feature phone users via Interactive Voice Response (IVR) technology.

Launched in January 2023, the project enables secure financial transactions without the need for Internet access or smartphones. By focusing on rural, semi-urban and underserved communities, it directly addresses India’s pressing need for financial inclusion.

With services offered in 11 regional languages, UPI 123Pay provides an accessible, user-friendly, and scalable solution that empowers users through voice-based banking.

Project Objectives

1. Provide UPI payment capabilities to feature phone users without requiring internet access.
2. Offer secure and easy-to-use banking services such as money transfers, mobile recharges and bill payments via IVR.
3. Promote regional inclusivity through support for 11 Indian languages.
4. Onboard economically weaker and digitally underserved sections into the formal banking ecosystem.

Implementation Journey

The project began with a clear vision: bridging the digital divide using IVR technology.

Development Phase
The core functionalities—balance inquiry, fund transfers, recharges, and bill payments—were designed with robust security protocols and regional language support. The IVR system mimicked app-like navigation for ease of use.

Pilot Testing
Pilot launches in rural zones allowed collection of user feedback, which guided iterative improvements. These areas acted as testbeds to refine user experience and language accuracy.

Nationwide Rollout
UPI 123Pay was launched nationwide across tier-3 and rural areas. Staff training and mass awareness campaigns were conducted to facilitate smooth user onboarding and build trust.

Scaling and Enhancement
The system underwent continuous upgrades based on user behavior insights. Plans for adding features like recurring payments and DBT (Direct Benefit Transfers) integrations are in progress.

Challenges Encountered

Implementation was not without hurdles. These included:

• Technical Integration – Syncing the new IVR system with legacy banking and UPI platforms required extensive backend work.
• User Adoption – Educating feature phone users to adopt digital payments necessitated significant
  outreach.
• Language Localisation – Ensuring accurate translations across 11 languages was complex.
• Limited Awareness – Lack of exposure to digital banking demanded trust-building efforts.
• Scalability – Preparing the system to handle rising transaction volumes while maintaining performance remains an ongoing task.

Impact and Outcomes

• Enhanced Financial Inclusion – Access of Digital Banking to Feature Phone users.
• Customer Convenience – 24×7 availability of services drastically reduced dependency on branch visits.
• Cost Efficiency – Lowered operational costs for the bank and improved transaction speed.
• Support for Government Initiatives – Aligned with schemes like PMJDY and enabled DBT.
• Empowered Communities – Promoted economic activity in underserved areas by enabling seamless digital payments​.