Indian digital payments company PhonePe has moved a step closer to beginning operations in the United Arab Emirates after receiving in-principle approval from the Central Bank of the UAE for two financial licences. However, the company will need to secure final regulatory clearance before it can formally launch its commercial services in the Gulf country.
The approval covers licences related to Retail Payment Services and Card Schemes, as well as Stored Value Facilities. According to PhonePe, the in-principle approval came after the completion of the regulator’s initial due diligence process and establishes the foundation for the company’s proposed entry into the UAE market.
PhonePe, which is backed by Walmart, said it would work with regional banks, licensed payment service providers and local technology companies after receiving the final regulatory approval. The company’s proposed expansion is aimed at integrating its technology with the UAE’s existing financial and payments infrastructure rather than operating independently of the country’s established ecosystem.
The company also plans to explore opportunities involving the UAE’s domestic payment systems, including Aani and Jaywan. PhonePe said its technology platform has been developed to handle large volumes of digital transactions, with the company currently serving more than 700 million registered users and over 50 million merchants in India.
PhonePe was launched in India in 2016 and has become one of the country’s major digital payment platforms. Its application enables users to make payments, recharge mobile connections, pay bills and transfer money through the Unified Payments Interface network.
The UAE expansion would mark PhonePe’s first international market in terms of establishing a regulated commercial presence. The company, however, already has a limited cross-border payments presence in the country. Through a partnership with NPCI International Payments Limited, Indian travellers in the UAE can use PhonePe to scan local QR codes and make payments at participating terminals operated by payment networks including NEOPAY and Network International.
PhonePe’s proposed entry comes as the UAE continues to develop its digital payments infrastructure and promote cashless transactions. The company said its decision to expand into the country is aligned with the UAE’s Financial Infrastructure Transformation programme and its broader digital-economy objectives.
Ritesh Pai, CEO and Executive Director, International Payments at PhonePe, said the company viewed the regulatory approval as an important milestone in its international expansion. He said PhonePe intended to combine its technology with local partnerships and contribute to payment and commerce links connecting the UAE, India and global markets.
The development also comes at a significant time for PhonePe as the company prepares for a potential public listing. Earlier this year, PhonePe put its planned initial public offering on hold, citing geopolitical uncertainty and volatile global market conditions. The company has indicated that it intends to revive the listing process when market conditions become more stable.
PhonePe is reportedly seeking a valuation of between $9 billion and $10.5 billion through the proposed IPO. Its filings show that Walmart plans to reduce its stake in the company by about 12% through the offering, while existing investors Tiger Global and Microsoft are expected to exit their investments through the proposed transaction.
For now, PhonePe’s UAE plans remain subject to the completion of the remaining regulatory requirements. The company said it would continue working with UAE authorities before seeking the final approval needed to commence commercial operations.
