PhonePe has received in-principle approval from the Central Bank of the UAE for two licences to start regulated payment operations in the country. The approval covers Retail Payment Services and Card Schemes (RPSCS) and Stored Value Facilities (SVF) and marks PhonePe’s first full international expansion outside India. The move opens the door for wallets, merchant payments and instant transfers for millions of Indians living in and visiting the UAE.
What Is PhonePe and How Does It Work?
PhonePe is an Indian digital payments company headquartered in Bengaluru. PhonePe was founded in December 2015 by Sameer Nigam, Rahul Chari and Burzin Engineer, and the PhonePe app went live in August 2016. PhonePe is majority owned by Walmart after its separation from Flipkart in 2022.
PhonePe works on the Unified Payments Interface (UPI), which is an instant real time payment system developed by the National Payments Corporation of India (NPCI). A user links a bank account to the PhonePe app, creates a UPI PIN (personal identification number) and then sends or receives money using a mobile number, QR code or bank details. The money moves directly from one bank account to another within seconds, without needing card details.
PhonePe is the largest UPI app in India by volume. PhonePe reported more than 72 crore registered users and a network of over 5 crore merchants (as of August 2026). In April 2026, PhonePe processed over 46 percent of all UPI transactions in India. Beyond payments, PhonePe also distributes insurance, credit through partner banks and non banking finance companies, mutual funds through Share.Market, and runs the Indus Appstore.
What Are the Two UAE Licences Approved for PhonePe?
The Central Bank of the UAE has given PhonePe in-principle approval for two licences. These are the Retail Payment Services and Card Schemes licence, which covers merchant payments and money transfers, and the Stored Value Facilities licence, which covers digital wallets and prepaid instruments like gift cards.
The first licence is Retail Payment Services and Card Schemes (RPSCS). The Central Bank of the UAE, which regulates all payment activity in the country outside the financial free zones, issues this licence under its RPSCS Regulation. The regulation lists nine service categories. These include payment account issuance, payment instrument issuance, merchant acquiring, payment aggregation, domestic and cross border fund transfers, payment token services, payment initiation services and payment account information services. In simple terms, this licence will allow PhonePe to sign up local merchants, deploy point of sale devices, accept card and account based payments, and handle transfers within the UAE and between the UAE and other countries.
The second licence is for Stored Value Facilities (SVF). A Stored Value Facility is any non cash facility where a customer pays money to an issuer and the value is stored on the facility for later use. The issuer gives a clear promise, called a relevant undertaking, to supply goods, pay for goods, or pay another person when the customer uses the stored value. SVF covers both device based facilities such as prepaid cards and non device based facilities such as mobile e wallets and internet based payment accounts. This licence will allow PhonePe to offer its own wallet, gift cards and similar prepaid products in the UAE.
| Licence | What It Allows | Examples of Use |
|---|---|---|
| RPSCS | Retail payments, merchant acquiring, aggregation and fund transfers | QR payments at shops, point of sale machines, cross border remittances, payment gateway for online sellers |
| SVF | Issue and operation of stored value products | PhonePe wallet balance, gift cards, prepaid accounts for residents and enterprises |
The current approval is an in-principle approval (IPA). The Central Bank of the UAE grants IPA after initial regulatory due diligence. IPA creates a foundational regulatory presence but does not permit commercial launch. PhonePe must now meet remaining conditions on capital, technology, risk controls and local partnerships to secure final approval.
Can PhonePe Be Used in the UAE and Dubai?
PhonePe can already be used in a limited way in the UAE by Indian visitors, but full local services are not live yet. Indian travellers can pay with UPI at select terminals, while UAE residents will get wallets and local merchant payments only after PhonePe receives final approval from the Central Bank of the UAE.
At present, PhonePe works in the UAE through cross border UPI acceptance. Since March 2024, PhonePe users travelling to the UAE can scan QR codes at Mashreq NEOPAY terminals and Network International terminals in shops, restaurants and tourist spots. These terminals accept UPI apps as a payment instrument through a partnership with NPCI International Payments Limited (NIPL), which was set up on 3 April 2020 as the overseas arm of NPCI. The account is debited in Indian rupees and the exchange rate is shown at the time of payment.
Non Resident Indians living in the UAE can also use this route. Those with UAE mobile numbers can download the PhonePe app and link their existing Non Resident External (NRE) and Non Resident Ordinary (NRO) accounts with Indian banks to pay at these terminals. To use UPI abroad, a user opens the profile section in the app, selects UPI International under payment settings, activates the chosen bank account and enters the UPI PIN.
What is a PhonePe wallet in this context is important to understand. A PhonePe wallet is a prepaid account where money is loaded in advance and then used for shopping, bill payment or transfers without using a bank account each time. The new SVF licence will allow PhonePe to offer such a UAE based wallet directly, which is different from the current system where payments are pulled from an Indian bank account.
After final approval, the scope will widen sharply. A UAE citizen will be able to pay on a UAE point of sale device using a local PhonePe account and send money to India and back. PhonePe has said its UAE business will include wallets, gift cards, remittances and local merchant payments.
Why the UAE Is PhonePe First International Market
The Central Bank of the UAE announced the in-principle approval on 22 September 2026. PhonePe founder and Chief Executive Officer Sameer Nigam had first signalled the move on 9 September 2026 on the sidelines of the Global Fintech Festival in Mumbai, where he said the UAE would be PhonePe’s first foreign market.
The UAE was chosen for clear commercial and strategic reasons. The country hosts about 4.3 million Indians, the largest expatriate community in the Emirates. These residents regularly pay bills, manage income earned in dirhams, pay taxes in India and send money home. India is also one of the largest sources of tourists to Dubai, with 2.46 million Indian visitors in 2023 alone. A payment app that works smoothly in both countries directly serves this daily flow of people and money.
Remittances form the second anchor. The India UAE corridor is among the busiest remittance routes in the world. By handling local collection in the UAE and payout in India, PhonePe can offer faster transfers and simpler user experience than routing every payment through an Indian bank account. The company has said it will explore foreign exchange services as part of its UAE offering.
The third reason is regulation. Ritesh Pai, Chief Executive Officer for International Payments at PhonePe, said the regulatory clarity and digital vision of the UAE make it ideal for starting global operations. Unlike a banking licence, which allows deposit taking, the UAE retail payments framework gives fintech firms a clear path to offer payments without becoming a bank. This mirrors PhonePe model in India, where PhonePe distributes credit, insurance and investment products through partner banks and finance companies instead of holding a banking licence itself.
How This Move Is Different From Earlier UPI Acceptance in the UAE
PhonePe presence in the UAE so far has been built around Indian bank accounts. The new licences change that model completely. Earlier acceptance helped Indian travellers, while locally licensed operations will allow PhonePe to serve UAE merchants and residents directly.
Under the earlier system, an Indian visitor scanned a QR code in Dubai and the money left an Indian bank account in rupees. The UAE merchant received payment through Mashreq NEOPAY or Network International, which acted as the local acquirer. PhonePe did not hold a UAE licence and did not settle funds locally.
Under the new system, PhonePe will acquire merchants itself, deploy its own point of sale devices, hold wallet balances under UAE rules and settle in local currency. This means a shop in Dubai can sign up with PhonePe directly, and a resident in Abu Dhabi can keep money in a PhonePe UAE wallet. It is the shift from cross border use of an Indian app to a domestic UAE payment business.
This scale matters because PhonePe leads UPI at home. In April 2026, PhonePe and Google Pay together handled more than 80 percent of UPI transactions in India.
| App | Share of UPI Volume in April 2026 | Position |
|---|---|---|
| PhonePe | About 47 percent | Largest UPI app |
| Google Pay | About 33 percent | Second largest |
| Paytm | About 8 percent | Distant third |
PhonePe strength in handling high volumes, QR based merchant onboarding and low cost devices such as SmartSpeakers is the technology base it plans to carry to the UAE.
PhonePe Role in the UAE Financial Infrastructure Transformation Programme
The Financial Infrastructure Transformation (FIT) Programme is the Central Bank of the UAE national plan to modernise payments. The Central Bank of the UAE owns this programme and runs it largely through its subsidiary Al Etihad Payments, which was set up in 2023 to operate national payment infrastructure.
Two homegrown rails sit at the centre of this plan. Aani is the instant payments platform launched in October 2023. Aani moves money from one bank account to another in seconds, day and night, using a mobile number, Emirates ID, email address, QR code or bank account number instead of long account details. Jaywan is the national domestic card scheme of the UAE. Jaywan works like RuPay in India and mada in Saudi Arabia. It gives the UAE its own card network for shops, online shopping, ATMs and digital wallets, which can lower costs and keep payment data under local rules.
Both systems are scaling fast. In August 2026, the Ministry of Finance adopted Aani and Jaywan for payment of federal service fees and fines, making them part of government collections. Aani allows transfers of up to 50,000 dirhams per transaction, with daily limits set by each bank.
PhonePe has said its proposed deployment will complement this infrastructure rather than compete with it. After final approval, PhonePe plans to work with regional banks, licensed payment service providers and local technology vendors to advance the cashless economy vision of the UAE leadership. PhonePe will also explore ways to support Aani and Jaywan using its full stack technology platform, which already handles QR payments, device management and high volume settlement in India.
What Happens Next After In-Principle Approval
In-principle approval is only the first gate. PhonePe will now work with the Central Bank of the UAE to complete all remaining requirements for final approval. These steps typically include proof of paid up capital, protection of customer float, technology and cyber security audits, anti money laundering controls and agreements with local banking partners. PhonePe has not given a timeline for commercial launch.
Once final approval arrives, PhonePe can start onboarding UAE merchants, issuing wallets and processing live transactions. The company has said it wants to build a global business over the next decade, with the UAE as the starting point. The international push runs parallel to its domestic plans, where PhonePe received regulatory clearance for its stock market listing in January 2026 and is preparing for a public issue after being valued at $12 billion in 2023.
For the banking system, the case is a clear example of how retail payment licences work across borders. A fintech firm must take a separate licence in each country, follow local safeguarding rules and connect to national rails. Success in the UAE could become a template for PhonePe entry into other markets with large Indian links, such as Singapore, Mauritius, Nepal, Bhutan, Sri Lanka and Cambodia, where UPI acceptance for Indian travellers already exists.
Key Takeaways
- PhonePe received in-principle approval on 22 September 2026 from the Central Bank of the UAE for two licences, marking its first international expansion.
- The two licences are Retail Payment Services and Card Schemes (RPSCS) for merchant payments and transfers and Stored Value Facilities (SVF) for wallets and gift cards.
- PhonePe is an Indian company founded in December 2015 in Bengaluru and majority owned by Walmart, with over 72 crore registered users (as of August 2026).
- The UAE hosts about 4.3 million Indians, making wallets, remittances and merchant payments the core use cases for the expansion.
- Aani is the UAE instant payments platform launched in October 2023 and Jaywan is the national domestic card scheme, both operated by Al Etihad Payments set up in 2023.
- In-principle approval does not allow commercial launch, and PhonePe must secure final approval before starting full UAE operations.
