Dubai: Indian digital payments company PhonePe has received in principle approval from the Central Bank of the United Arab Emirates for two payment licences, bringing the company closer to entering its first international market.
The approval covers licences for Retail Payment Services and Card Schemes and Stored Value Facilities. PhonePe still needs final approval from the UAE central bank before it can begin commercial operations in the country.
The development is part of PhonePe's plans to expand beyond India. The company has been preparing to establish a locally regulated payments business in the UAE, where it plans to offer a range of digital payment services.
The Retail Payment Services and Card Schemes licence covers a range of regulated payment activities, while the Stored Value Facilities licence covers regulated stored value services.
PhonePe has previously said that its UAE business could include consumer payments, wallets, gift cards and merchant acquiring services. These services should not be treated as already operational because the company has not yet received the final regulatory approval needed to start its commercial activities.
PhonePe was founded in 2016 and has become one of India's major digital payments companies through its use of the Unified Payments Interface, or UPI. The company is backed by US retail giant Walmart.
The UAE has established financial and payment links with India, and Indian users have already been able to use certain UPI international payment services at participating merchants in the country.
PhonePe's planned UAE operation is different from those existing cross border services. The new move involves establishing a locally regulated payments business under the UAE central bank's regulatory framework.
The UAE has been developing its own digital payments infrastructure. Its payment system includes Aani, an instant payments platform operated by Al Etihad Payments, as well as Jaywan, the country's national card payment scheme.
PhonePe plans to explore opportunities to support the UAE's domestic payment systems, including Aani and Jaywan. However, there is no confirmation that such integrations are already operational.
PhonePe's move into the UAE follows a regulatory process that began earlier. Its applications for the two UAE licences were dated February 10, 2025. Its UAE entity, PhonePe Middle East FZ LLC, was incorporated on October 31, 2025.
The UAE approval comes as PhonePe also continues to consider plans for a public share offering. The company had earlier put its initial public offering plans on hold amid uncertainty in global markets and geopolitical conditions.
PhonePe will need final regulatory approval before it can begin commercial operations in the UAE.