India's PhonePe Gets Initial UAE Central Bank Nod for Payment Licenses; First International Market Entry

PhonePe has secured in-principle approval from the Central Bank of the UAE for two payment licences, marking its first international market entry. The Walmart-backed fintech plans to offer wallets, gift cards, remittances and merchant acquiring in the Emirates.

PhonePe has received in-principle approval from the Central Bank of the UAE for two payment licences, marking the Indian fintech giant's first international market entry . The approvals cover Retail Payment Services and Card Schemes and Stored Value Facilities, following the completion of initial regulatory due diligence .

"We are honoured to receive In-Principle Approval from the CBUAE. The country's vision and regulatory environment make it an ideal setting for our international journey," said Ritesh Pai, CEO and Executive Director, International Payments at PhonePe.

What the Licences Allow

The two licences will enable PhonePe to offer a range of services in the UAE, including its own wallet, gift cards, remittance services for the Indian diaspora, and local merchant acquiring. The company plans to work with regional banks, licensed payment service providers and local technology companies once it receives final regulatory clearance. PhonePe also plans to explore opportunities to support Aani and Jaywan, the UAE's domestic payment rails, through its technology platform. The company's expansion aligns with the UAE's Financial Infrastructure Transformation programme and its plans to develop a cashless economy.

From Cross-Border to Local Operations

PhonePe is not entirely new to the UAE. Indian travellers can already make UPI payments at select merchant terminals through a partnership with NPCI International Payments Limited. However, the new licences change the scope entirely. PhonePe can now operate as a local payments company inside the UAE, serving UAE residents and merchants directly rather than acting solely as a bridge for outbound Indian spending. One clear use case stands out: remittances. The UAE hosts one of the largest Indian expatriate communities in the world, and the UAE-India corridor ranks among India's largest sources of inward remittances.

A Broader Global Push

The UAE announcement follows a similar move by rival Paytm, which secured a payment institution licence from Luxembourg's financial regulator in July, allowing it to offer payment services across the European Union. The pattern is clear: India's biggest UPI players have largely exhausted the easy growth left in the domestic market and are now hunting for revenue outside it. PhonePe's platform serves more than 700 million registered users and 50 million merchants in India. The company is also preparing for an IPO, having filed its updated draft red herring prospectus with SEBI in January 2026, though it paused its listing plans in March citing geopolitical tensions.

Here is the question this approval raises. PhonePe has secured in-principle approval to operate as a local payments company in the UAE, moving beyond simply facilitating UPI for Indian travellers. When an Indian fintech with 700 million users goes global for the first time, does it signal a new era of cross-border fintech expansion, or is it simply chasing the same remittance corridor that every other Indian payments company has already targeted?

FAQ:

Q: What licences has PhonePe received from the UAE Central Bank?
A: PhonePe has received in-principle approval for two licences: Retail Payment Services and Card Schemes, and Stored Value Facilities.

Q: What services will PhonePe offer in the UAE?
A: PhonePe plans to offer its own wallet, gift cards, remittance services for the Indian diaspora, and local merchant acquiring.

Q: Does the approval mean PhonePe can start operations immediately?
A: No. The in-principle approval is the first step. PhonePe must secure final regulatory clearance before starting commercial operations.

Q: How does this differ from PhonePe's existing UAE presence?
A: PhonePe already enables UPI payments for Indian travellers at select UAE terminals. The new licences allow PhonePe to serve UAE residents and merchants directly as a local payments company.

Q: Why is the UAE PhonePe's first international market?
A: The UAE has a large Indian expatriate community, a significant remittance corridor with India, and a regulatory environment aligned with PhonePe's expansion plans.

Q: Is PhonePe planning to go public?
A: Yes. PhonePe filed its updated draft red herring prospectus with SEBI in January 2026, though it paused its IPO plans in March citing geopolitical tensions and market volatility.