PhonePe is taking a major step towards expanding its payments business beyond India after receiving in-principle approval from the Central Bank of the UAE (CBUAE) for two payment licences.
The Bengaluru-based fintech said on September 22 that it had received approvals for Retail Payment Services and Card Schemes (RPSCS) and Stored Value Facilities (SVF). The move brings PhonePe closer to establishing a locally regulated payments business in the UAE, its first overseas market.
Credits: Firstpost
PhonePe Moves Beyond UPI Acceptance in UAE
PhonePe has already established a presence in the UAE by enabling Indian consumers to make UPI payments at local merchants. Through its partnership with NPCI International Payments Limited (NIPL), PhonePe users can scan eligible QR codes and pay through NEOPAY and Network International terminals.
However, the latest approvals could significantly expand the company’s role in the market. Instead of only facilitating payments for Indian users travelling to the UAE, PhonePe is now looking to build a broader payments operation that operates within the country’s regulatory framework.
The company has completed the initial regulatory due diligence but will still need to obtain final approval from the CBUAE before starting commercial operations.
“The country’s vision and regulatory environment make it an ideal setting for our international journey,” said Ritesh Pai, CEO and executive director of International Payments at PhonePe.
Pai added that PhonePe plans to combine its technology with local partnerships to support economic and trade links between the UAE, India and global markets.
PhonePe Plans Integration With UAE Payments Infrastructure
As part of its expansion plans, PhonePe said it intends to work with UAE banks, licensed payment service providers and technology companies. These partnerships are expected to help the fintech integrate its services with the country’s domestic payments infrastructure.
PhonePe is also looking at opportunities involving Aani, the UAE’s instant payments platform, and Jaywan, the country’s domestic card scheme. The company said its technology stack could potentially be used to support both initiatives.
The move comes as the UAE continues to promote digital payments and modernise its financial infrastructure. PhonePe cited the country’s Financial Infrastructure Transformation (FIT) programme and its broader push towards a digital-first economy as factors behind its decision to enter the market.
For PhonePe, the UAE also offers a natural starting point for international expansion. The country has a large Indian population and attracts millions of Indian travellers, creating an established ecosystem for cross-border digital payments.
Credits: Moneycontrol
PhonePe’s UPI Scale Gives It a Strong Base
PhonePe is already India’s largest UPI player, with more than 45% of the UPI market. The company processes close to 12 billion transactions every month, with the total value of transactions approaching Rs 14 lakh crore.
Its existing scale could provide a significant technology and customer-experience base as it develops its international payments business.
The company also has more than 700 million registered users and 50 million merchants in India. While those numbers do not directly translate into customers in the UAE, they highlight the scale of the payments infrastructure PhonePe has built domestically.
UPI itself has also expanded internationally through NIPL, the international arm of NPCI. The payment system is now available in more than 15 countries, giving Indian fintech companies an increasingly established framework for cross-border payments.
PhonePe’s UAE strategy, however, represents a broader ambition. Rather than simply extending UPI acceptance, the company is seeking to establish itself as a regulated payments player in another country.
If it receives final regulatory approval, the UAE operation could become an important test case for PhonePe’s international expansion strategy. The company can potentially use the market to develop partnerships, payment products and technology integrations before exploring opportunities in other international markets.
