The United Arab Emirates (UAE) and India have strengthened their economic ties by entering into an exciting financial technology (fintech) partnership.

Indian fintech giant Paytm has officially planted its flag in the UAE, establishing Paytm Arab Payments LLC. No governmental or regulatory approvals were needed for its incorporation.

On paper, this move is strictly business. But it has the capacity to influence technological integration, talent movement, regulatory alignment and the entire future of the sector.

This expansion comes at a crucial time for Paytm with the Reserve Bank of India’s clampdown on its payments bank operation in India. Paytm is hoping to turn it into an international opportunity.

Much like it did during India’s 2016 demonetisation, which saw its user base grow from 30 million to over 200m within a year, Paytm is once again seizing adversity as a moment to pivot. 

Back then, it evolved from a mobile wallet into a comprehensive digital services platform. This time, it is going from a consumer-first app into a B2B technology exporter.

The iGaming Sector Could be the Next Frontier for UAE-India Tech Partnership

The notion of legal casinos in the UAE previously seemed implausible. But times have changed in recent years. The UAE is the face of the growing integration of gambling in the Middle East. 

After opening the door for Wynn Resorts to construct a multi-billion-dollar resort in Ras Al Khaimah, the UAE subsequently set up a regulatory body to oversee their activities.

The resort in Ras Al Khaimah will house the first-ever land-based casino. It is only a matter of time before online casinos in the UAE become more prevalent. 

This is where the UAE-India tech partnership could prove useful again. The same mobile-first philosophy that Paytm used to democratise payments in India could be applied in the iGaming sector to make digital gaming platforms safer for Arab players.

The UAE is on course to become the first Gulf nation to openly license and host online casinos, which is major news for a country which has traditionally adopted a conservative stance towards gambling.

Paytm has all the tools to be used as a foundational pillar in such endeavours, which would further strengthen the economic ties between the UAE and India.

Why the UAE Makes Economic Sense for Indian Tech Giants

The UAE has a unique regulatory foundation that makes it attractive to businesses, and Paytm is no different. It is the perfect platform for the Indian giants to kick off a new chapter.

This development is not entirely about regulatory arbitrage, although the absence of corporate tax zones and the UAE’s start-up-friendly environment does not hurt. What really stands out is the UAE’s growing popularity as a global hub for fintech and digital innovation.

The UAE is a fertile ground that allows businesses to thrive. Experts claim that the UAE is home to nearly one-quarter of all fintech companies in the Middle East and Asia region (MENA).

The industry is also predicted to grow to $3.56 billion by the end of this year.  That accounts for a 12.56% annual increase, making it one of the fastest-growing markets globally for digital payment solutions, so the UAE has become a blueprint for other Gulf States to follow.

Paytm’s Middle East venture is just the start of a mutually beneficial relationship between the UAE and India. There are other high-profile events that serve the same purpose.

The upcoming ‘Future of Learning: Innovation, Technology & Entrepreneurship’ summit, scheduled to be staged in Dubai later this month, will be another concrete step forward.

The event is organised by Khaleej Times and features leaders from both governments, educational sectors and tech start-ups.