PhonePe Introduces UPI Payments for Indians in UAE

PhonePe is a multinational digital payments and financial services company based in Bengaluru, Karnataka, India. It was established in December 2015 by Sameer Nigam, Rahul Chari, and Burzin Engineer. The PhonePe app, utilizing the Unified Payments Interface (UPI), was launched in August 2016. The PhonePe app is available in 11 different Indian languages, allowing users to easily perform a wide range of financial transactions. These include sending and receiving money, recharging mobile and DTH services, topping up data cards, making utility payments, and conducting in-store payments.

Related: NPCI is in Talks with Banks, FinTech for Payment System Integration

On Thursday, March 28, PhonePe, the renowned fintech powerhouse, announced a breakthrough for its users: the ability to seamlessly conduct digital transactions in the UAE. This innovative service, powered by UPI technology, will exclusively be accessible through Mashreq Bank’s NEOPAY terminals.

With this convenient feature, users can effortlessly complete transactions by scanning the QR code, with funds debited from their accounts in INR at the prevailing currency exchange rates. This milestone achievement stems from the collaborative efforts of Mashreq Bank, which has partnered with NPCI International Payments Limited (NIPL), the global extension of NPCI.

Moreover, Non-Resident Indians (NRIs) with UAE mobile numbers can link their current NRE (Non-Resident (External)) and NRO (Non-Resident (Ordinary)) accounts to their PhonePe app for making payments. PhonePe plans to offer inward remittance services once authorized by the authorities.

The United Arab Emirates (UAE) is a highly sought-after destination, attracting millions of Indian visitors annually. Through this partnership, customers can now easily make transactions using UPI, a payment method familiar to them. Ritesh Pai, CEO of PhonePe’s International Payments, stated that this collaboration will facilitate seamless transactions, enhancing the overall experience for visitors.

Jumping into the conversation, Anubhav Sharma, deputy head of partnership business development and marketing at NIPL, emphasized, “Our goal is to actively team up with financial institutions worldwide, forming partnerships aimed at providing convenient and secure cross-border payment solutions for consumers. This collaboration fosters fintech cooperation and brings together the ecosystem to simplify payment procedures for Indian travelers heading to the UAE.”

It’s worth noting that NPCI has also joined forces with other financial institutions in the UAE, such as Arab Monetary Fund through Buna and Network International. Furthermore, in February of this year, the digital payments infrastructure was integrated with the UAE’s instant payments platform AANI, enhancing cross-border transactions between the two countries.

Recently, both nations inked a deal to link their local card networks—RuPay from India and JAYWAN from the UAE. This move aims to boost the acceptance of RuPay cards in the Middle East. Prime Minister Narendra Modi introduced RuPay card services during his visit to the UAE earlier this year.

Meanwhile, UPI continues its impressive growth in India. In 2023, UPI recorded a remarkable 11,768 crore transactions valued at INR 182.84 lakh crore. In February of this year alone, the payment system saw 1,210 crore transactions totaling INR 18.28 lakh crore.

PhonePe, owned by Walmart, remains the dominant player in the UPI payments sector, with Google Pay following closely behind. Combined, these two players hold a market share of over 80%. Despite this strong position, PhonePe has continued to experience significant losses. In the fiscal year 2023, its net loss increased by 39% year-on-year to INR 2,795.3 Cr, while operating revenue saw a 77% YoY growth to INR 2,913.7 Cr.

PhonePe’s breakthrough enables seamless UPI-powered digital transactions in the UAE through Mashreq Bank’s NEOPAY terminals, offering convenient features like QR code scanning and INR debiting. The collaboration with NPCI International Payments Limited empowers NRIs with familiar payment options, fostering cross-border fintech cooperation and enhancing the financial ecosystem. Integration with the UAE’s instant payments platform and the linkage of local card networks strengthen cross-border transactions. Despite its dominant position in India’s UPI payments sector, PhonePe faces significant losses despite a remarkable overall market share.