IPO-Bound PhonePe Gets Final Nod To Operate As Payment Aggregator

Walmart-owned fintech PhonePe has received the final authorisation from the Reserve Bank of India (RBI) to operate as an online payment aggregator (PA). The development comes over two years after PhonePe received in-principle approval from the RBI in August 2023 to operate as an online payment aggregator. 

The authorisation will enable PhonePe to expand its reach among online merchants, with a particular focus on small and medium businesses (SMEs) across the country.

“PhonePe is well-positioned to accelerate financial inclusion by providing accessible payment solutions to businesses that were previously underserved, particularly in the SME segment. The company’s focus on serving both established enterprises and emerging businesses aligns with its goal of enabling broader digital financial inclusion,”  PhonePe’s CBO-merchant business Yuvraj Singh noted.  

For context, a PA licence allows fintech platforms to onboard merchants and deploy digital payment solutions. It enables licence holders to let merchants accept various payment instruments, pool customer collections, and receive settlements without needing to create a separate integration system.

PhonePe has maintained its leadership position in India’s UPI market for nearly five years. In August 2025, it processed 915 Cr UPI transactions worth nearly INR 12 Lakh Cr, commanding a 46.5% market share. The platform currently handles about 360 Mn transactions daily from a base of 650 Mn registered users.

Beyond UPI, PhonePe operates a diversified business portfolio spanning lending, insurance, investment tech, ecommerce app Pincode, and the Indus AppStore. Recently, it exited its NBFC business, surrendering its licence to the RBI on August 29.

The key regulatory approval comes as the fintech gears up for its much-anticipated public listing. PhonePe is expected to confidentially file its draft red herring prospectus (DRHP) with SEBI later this month. It is eyeing a public listing in early 2026, looking to raise $1.2 Bn–$1.5 Bn (about INR 10,000 Cr–INR 13,000 Cr) at a valuation of $7 Bn–$8 Bn.

The IPO is likely to include both fresh shares and an offer-for-sale (OFS). While Walmart, PhonePe’s majority owner, is not expected to dilute a significant portion of its stake, investors such as Tiger Global and General Atlantic may consider partial exits.

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