India’s PhonePe has secured in-principle approval from the Central Bank of the UAE for two payment licences, opening the way for the country’s largest UPI platform by transaction volume to establish its first locally regulated international payments business.
The approvals cover Retail Payment Services and Card Schemes and Stored Value Facilities, following initial regulatory due diligence. PhonePe must complete remaining requirements and secure final CBUAE authorisation before commencing commercial operations.
The move would take PhonePe beyond its existing UAE model, under which Indian travellers can use UPI at participating merchants through arrangements involving NPCI International, NEOPAY and Network International. A local regulatory presence could eventually support a broader payments franchise, subject to the permissions included in its final licences.
PhonePe also intends to explore opportunities to support Aani, the UAE’s instant-payment platform, and Jaywan, its domestic card scheme, potentially placing its technology alongside the Emirates’ expanding national payments infrastructure rather than simply extending UPI acceptance overseas.
Competition in the UAE will be immediate and increasingly diversified. e& money represents the telecom-backed financial-super-app model, using e&’s domestic distribution to scale payments, cards, remittances and lending; Tabby is moving from consumer credit into everyday money management through its regulated Tabby Cash account, cards and transfers; while Astra Tech’s botim money is building a communications-led financial ecosystem spanning wallets, Aani and IBAN transfers, QR payments, cards and international remittances. Together, the three represent distinct models competing for a larger share of the UAE consumer’s everyday financial activity.
PhonePe brings formidable scale, with more than 700mn registered users and over 50mn merchants in India, but domestic dominance does not confer UAE market share. The commercial test will be whether it can convert India-linked network effects and technological scale into locally generated transactions against established competitors with existing UAE customer relationships, distribution and regulatory infrastructure.
The UAE therefore represents more than PhonePe’s first overseas licensing exercise. It will test whether the company can turn UPI-scale technology and its powerful India-linked network effects into a locally embedded UAE payments franchise.
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