IPO-Bound PhonePe Secures RBI Approval to Operate as Payment Aggregator

The Reserve Bank of India (RBI) has granted Walmart-owned fintech PhonePe full approval to function as an online payment aggregator (PA). This comes more than two years after the RBI granted PhonePe in-principle permission to function as an online payment aggregator in August 2023.

With the approval, PhonePe will be able to access more online retailers, concentrating on small and medium-sized enterprises (SMEs) around the nation. Yuvraj Singh, the CBO merchant business for PhonePe, said that the company is in a good position to speed up financial inclusion by offering easily accessible payment options to underserved firms, especially in the SME sector. The company’s mission to facilitate wider digital financial inclusion is in line with its emphasis on working with both well-established companies and start-ups.

How PA Licence Will Empower PhonePe?

Fintech platforms can implement digital payment solutions and onboard businesses with a PA licence. Without having to develop a separate integration system, it allows licence holders to allow merchants to accept a variety of payment methods, pool customer collections, and receive settlements.

For almost five years, PhonePe has remained the market leader in India’s UPI space. It held a 46.5% market share in August 2025 after processing 915 Cr UPI transactions valued at around INR 12 Lakh Cr. Currently, the platform manages over 360 million transactions every day from 650 million registered users.

In addition to UPI, PhonePe has a diverse business portfolio that includes the Indus AppStore, the e-commerce app Pincode, investing tech, insurance, and financing. It recently stopped operating as an NBFC and turned in its licence to the RBI on 29 August.

PhonePe all Set for its IPO

The significant regulatory approval coincides with the fintech’s much-awaited public debut. Later this month, PhonePe is anticipated to submit its draft red herring prospectus (DRHP) to SEBI in a secret manner. In order to raise $1.2 billion to $1.5 billion (about INR 10,000 crore to INR 13,000 crore) at a valuation of $7 billion to $8 billion, it plans to go public in early 2026.

Both new shares and an offer-for-sale (OFS) are probably going to be part of the IPO. Although it is not anticipated that Walmart, the company’s largest shareholder, will significantly reduce its investment, investors Tiger Global and General Atlantic might think about making partial departures.