IPO-Bound PhonePe Secures In-Principle Nod For UAE Payments Business

Walmart-backed PhonePe has received in-principle approval from the Central Bank of the UAE (CBUAE) for two payment licences, taking the IPO-bound fintech major closer to launching its first locally regulated payments operation outside India.

The approvals cover Retail Payment Services and Card Schemes (RPSCS) and Stored Value Facilities (SVF). While the RPSCS licence covers regulated retail payment services, the SVF licence permits the issuance and operation of stored-value products such as digital wallets.

However, the in-principle approvals do not allow PhonePe to immediately begin commercial operations. The fintech major will have to fulfil the remaining regulatory requirements and secure final approval from the CBUAE. 

Following the final nod, PhonePe plans to collaborate with regional banks, licensed payment service providers, and local technology vendors in the UAE. It will also explore opportunities to support Aani and Jaywan, the country’s domestic payment networks, using its technology platform.

The development would mark PhonePe’s first international foray involving domestic business operations. The fintech major already enables Indian travellers in the UAE to scan local QR codes and make UPI payments at NEOPAY and Network International terminals through its partnership with NPCI International Payments.

PhonePe has been laying the groundwork for overseas expansion for some time. In September 2025, it incorporated PhonePe International Holdings Ltd in Abu Dhabi with a share capital of AED 20,000.

In its UDRHP, PhonePe said its UPI payment service was available to Indian users in Singapore, the UAE, Nepal, Sri Lanka, Bhutan, France, Qatar, and Mauritius through the infrastructure provided by NPCI International Payments. However, this cross-border facility is different from the domestic operations that PhonePe plans to launch in the UAE after receiving the final regulatory approvals. 

The development comes days after PhonePe’s monetisation prospects in India received a boost from the reintroduction of MDR on certain UPI merchant transactions.

PhonePe remains India’s largest UPI app by transaction volume. It processed around 11.25 Bn transactions worth ₹14.26 Lakh Cr in August, translating into a volume market share of 45.9%. However, its share slipped marginally from 46.1% in July.

Despite its market leadership, the fintech major’s net loss widened 62% YoY to ₹2,792 Cr in FY26 from ₹1,727.4 Cr in the previous fiscal year. The increase was driven by higher employee and marketing expenses, ESOP costs, and one-time write-offs.

Meanwhile, operating revenue rose 11.5% to ₹7,920.5 Cr from ₹7,105 Cr in FY25. Including other income of ₹467.4 Cr, total revenue increased 10% YoY to ₹8,387.9 Cr.

PhonePe paused its IPO plans in March amid geopolitical tensions in West Asia and volatility in global equity markets. However, the fintech major is now looking to revive the listing process following greater clarity on the UPI MDR framework.

Sources told Inc42 last week that PhonePe is targeting a public listing between February and March 2027.

“They have an almost 45% share of merchant payments. With greater clarity on the MDR regime, PhonePe is now looking to revise its IPO plans and could target a listing between February and March 2027,” the sources said.

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