22 September 2026
PhonePe, India’s largest digital payments platform, has received In-Principle Approval from the Central Bank of the UAE (CBUAE) for two licences: Retail Payment Services and Card Schemes (RPSCS) and Stored Value Facilities (SVF). The approval was announced on 22 September 2026 and is the company’s first regulatory clearance outside India, where it serves more than 700 million registered users and 50 million merchants. In-Principle Approval is not permission to trade. It confirms that the Central Bank has completed the initial regulatory due diligence, and it lets the applicant move to the final authorisation stage before any customer in the Emirates can be served.
What the Central Bank has approved
The clearance covers two separate regimes that together describe the core of a payments business: issuing a payment account, processing transactions for merchants, moving money inside the country and across borders, and holding customer money as a stored balance. PhonePe said it has completed the initial due diligence stage and will now work toward final approval before starting commercial operations.
Ritesh Pai, Chief Executive and Executive Director for International Payments at PhonePe, said the company aims to support the economic and trade corridors connecting the UAE, India and global markets, and that it plans to combine its own technology with local partnerships rather than operate on its own rails. Subject to final approval, PhonePe intends to work with regional banks, licensed payment service providers and local technology vendors.
The two licences in detail
The Retail Payment Services and Card Schemes Regulation was issued as Circular C 15/2021 and has been in force since 6 June 2021. It defines nine retail payment services: payment account issuance, payment instrument issuance, merchant acquiring, payment aggregation, domestic fund transfer, cross-border fund transfer, payment token services, payment initiation and payment account information. Providers are licensed in one of four categories, and the initial capital required depends on the category and on the monthly average value of payment transactions.
| Licence | Initial capital required by the CBUAE |
|---|---|
| RPSCS Category I | AED 3 million where monthly average payment volume is AED 10 million or above, AED 1.5 million below that threshold |
| RPSCS Category II | AED 2 million at or above AED 10 million a month, AED 1 million below it |
| RPSCS Category III | AED 1 million at or above AED 10 million a month, AED 500,000 below it |
| RPSCS Category IV | AED 100,000 regardless of payment volume |
| Stored Value Facilities | paid-up capital of at least AED 15 million, plus aggregate capital funds of at least 5 per cent of the total customer float |
The Stored Value Facilities Regulation, Circular C 6/2020, has been in force since 30 October 2020 and sets the higher bar of the two. Beyond the AED 15 million paid-up capital, an applicant must submit an unconditional and irrevocable bank guarantee for the full paid-up capital amount in favour of the Central Bank, payable on first demand and renewable before expiry. That guarantee is filed together with the licence application, which is one reason the SVF route is closed to thinly capitalised startups.
Aani, Jaywan and the FIT programme
PhonePe has said it will explore supporting Aani and Jaywan, the UAE’s domestic payment rails, through its technology platform. Aani is the national instant payments service that moves money in real time using a mobile number or a QR code. Jaywan is the national domestic card scheme. Both are operated by Al Etihad Payments, a subsidiary of the Central Bank, and both sit inside the Financial Infrastructure Transformation programme, the CBUAE initiative that PhonePe named as the framework its expansion is aligned with.
The company is not starting from zero in the market. Through its partnership with NPCI International Payments Limited, PhonePe already lets Indian travellers in the UAE scan local QR codes and pay at NEOPAY and Network International terminals under existing cross-border arrangements. The licences would change the nature of that presence: from serving visitors through a cross-border link to serving UAE residents and merchants directly.
How long the final step usually takes
In-Principle Approval and a working licence are separated by months of documentation, capital confirmation, governance and technology reviews. The most recent comparable case gives a usable benchmark: Revolut received in-principle clearance from the Central Bank in September 2025 and was granted the full Stored Value Facilities and Retail Payment Services (Category II) licences in June 2026, roughly nine months later. We covered that timeline in detail in our report on the Revolut UAE launch after its Central Bank licences. Edenred followed a similar path to its own SVF approval.
Nothing in the PhonePe announcement names a launch date, and the Central Bank does not publish a fixed processing time. Any company planning around a new provider entering the market should treat the final approval, not the in-principle stage, as the event to watch.
What this means for business in the UAE
- Nothing changes today. PhonePe cannot yet issue accounts, acquire merchants or hold balances in the Emirates, and will not be able to until final approval is granted.
- Merchant acquiring competition is the area to watch. A platform that processes payments for 50 million merchants in India is entering a market where acquiring fees are set by a small group of providers.
- Companies trading between the UAE and India should follow the Aani and Jaywan thread. If PhonePe connects to the domestic rails, settlement options for that corridor widen beyond correspondent banking.
- For any business considering its own payment licence, the capital table above is the real entry test: AED 100,000 for a Category IV payment initiation or account information service, AED 15 million plus a full bank guarantee for a wallet.
- A CBUAE payment licence does not replace a corporate bank account. Operating companies still need settlement accounts with a licensed UAE bank.
How Atlant Capital can help
Fintech and payments businesses coming to the Emirates usually face three questions at once: which jurisdiction to register in, which regulatory perimeter the product falls into, and how to get an operating bank account opened once the entity exists. We work on all three. Our company setup service covers jurisdiction choice, activity codes and licensing across free zones and mainland, which matters here because a payments product can land inside or outside the CBUAE perimeter depending on how it is structured. Our bank account opening service handles corporate accounts, the compliance file and liaison with the bank.
If you are at an earlier stage and want to understand how UAE banks assess a new company, its shareholders and its source of funds, start with our guide to opening a bank account in the UAE. It sets out the documents, the timelines and the questions compliance teams actually ask.
The bottom line
PhonePe’s In-Principle Approval is a procedural milestone rather than a market launch, but it is a meaningful one: the largest payments platform of a country that sends millions of workers, tourists and traders to the Emirates has chosen the UAE as its first market abroad, and the Central Bank has cleared the first gate. The practical questions, which licence category the final authorisation lands in, whether the Aani and Jaywan integrations happen, and what it does to acquiring pricing, will be answered at the final approval stage, not now.
Source: GCC Business News.
FAQ
Can PhonePe be used in the UAE right now?
Not as a local payment service. The Central Bank has granted In-Principle Approval only, which allows PhonePe to proceed to final authorisation and does not permit it to serve UAE customers. Indian travellers can already pay at NEOPAY and Network International terminals by scanning local QR codes, but that runs on an existing cross-border arrangement with NPCI International Payments Limited, not on a UAE licence.
What is the difference between In-Principle Approval and a CBUAE licence?
In-Principle Approval confirms that the Central Bank has completed its initial regulatory due diligence on the applicant. A licence is what allows the company to operate commercially. Between the two stages the applicant must satisfy capital, governance, technology and compliance requirements in full. For Revolut that gap ran from September 2025 to June 2026, about nine months.
What do the RPSCS and SVF licences allow a company to do?
The Retail Payment Services and Card Schemes licence covers nine digital payment services, among them payment account issuance, merchant acquiring, payment aggregation, domestic and cross-border transfers and payment initiation. The Stored Value Facilities licence covers holding customer money as an electronic balance, which is what makes wallets and prepaid products possible. A platform that wants both an account and a wallet needs both licences.
How much capital does a UAE payment licence require?
Under Regulation C 15/2021 the initial capital runs from AED 100,000 for a Category IV licence to AED 3 million for a Category I licence where the monthly average payment volume reaches AED 10 million or more. Under Regulation C 6/2020 a Stored Value Facilities licensee must hold paid-up capital of at least AED 15 million, keep aggregate capital funds of at least 5 per cent of the customer float, and file an unconditional bank guarantee for the full paid-up amount with the application.
