Indian fintech major Paytm has run into a regulatory hurdle as its licence application in the United Arab Emirates (UAE) has reportedly been held back by the country’s financial regulator. Three industry sources told reporters that Paytm had applied for two licences — one for acquiring/domestic payments and one for wallet-type services — which are now under review and not yet approved.
This development could impact Paytm’s planned Middle East expansion strategy, especially as it had formally set up a UAE-based subsidiary.
What Exactly Has Happened?
- The licence application in question appears to be with the UAE’s relevant regulatory authority for payments and fintech services, covering acquiring and wallet-products.
- Paytm’s filing shows that its Indian parent company, One97 Communications Ltd, through its subsidiary Paytm Cloud Technologies (PCTL), incorporated a wholly-owned subsidiary in the UAE called Paytm Arab Payments L.L.C. on April 30, 2025.
- The company earlier announced its Middle East expansion ambitions (UAE, Saudi Arabia, Singapore) as part of its global strategy.
- However, the “hold-back” of the licence means the UAE regulator has not yet granted formal permission for the services to commence.
Why This Matters
💡 Strategic expansion hit
Paytm has been positioning itself to expand beyond India’s borders into high-growth markets such as the UAE and Saudi Arabia. The delayed licence could slow down rollout, traction and monetisation in the region.
📊 Growth & investor implications
Any delay in licence approval may affect investor sentiment, especially since cross-border growth is often seen as a key lever for fintech valuations. Delays mean postponed revenue streams and higher regulatory risk.
⚠️ Regulatory & compliance risk highlighted
The move signals that even with strong ambitions, fintechs face rigorous local licensing and regulatory frameworks. Paytm must manage both Indian regulatory issues and foreign jurisdictions.
🧭 Competitive environment
If Paytm’s licence gets delayed or is less favourable, competitors may gain ground in the UAE market. The Middle East region is attractive to many fintechs and payments firms seeking international diversification.
Possible Reasons Behind the Hold-Back
- Local regulatory scrutiny: The UAE may be carefully evaluating Paytm’s application given its large scale and cross-border implications.
- Structure of business: The fact that Paytm set up a UAE subsidiary (Paytm Arab) suggests a new entity‐structure whose licensing and operations need exact clarity.
- Global risk factors: With increasing regulatory focus on fintechs, data localisation, cross-border payments and compliance, the UAE regulator may be proceeding cautiously.
- Operational readiness: There could be conditions on liquidity, consumer protection, AML/KYC compliance or technical infrastructure before licence issuance.
What’s Next for Paytm
- Paytm will likely engage with the UAE regulator to clarify the outstanding issues and provide additional documentation or modifications.
- It may proceed with partial rollout (e.g., partnerships or merchant payments under restricted activities) even as licensing is pending.
- Investors and markets will watch for formal announcement of licence grant or rejection. That would trigger reassessment of its expansion roadmap and financial forecasts.
- Paytm may also calibrate its Middle East rollout timeline and strategy contingent on the regulatory outcome.
Context: Paytm’s Broader Regulatory Journey
- In India, Paytm’s subsidiary Paytm Payments Services Ltd (PPSL) had its application for a payment aggregator licence initially rejected by the Reserve Bank of India (RBI) in November 2022 citing compliance issues.
- Later, in August 2025, PPSL received in-principle authorisation from the RBI to operate as an online payment aggregator. Business Today
- The UAE licence issue underscores the dual challenge Paytm faces: domestic regulatory risk + overseas expansion licensing risk.
Bottom Line
The report that Paytm’s licence application in the UAE is being held back is significant: it introduces uncertainty into its Middle East growth plans and underscores regulatory complexity for fintechs operating internationally. While the company has formally incorporated a UAE subsidiary, the timing and terms of the licence will determine how fast and how successfully it can execute in that region.
