Fintech Giant Faces Regulatory Queries
Digital payments leader PhonePe has been drawn into multiple money laundering investigations involving third-party merchants on its platform, according to recent regulatory filings. Official documents reveal the Enforcement Directorate (ED) sought transaction details related to gaming company Winzo and other merchants through three separate communications in December 2025.
Scope of Investigations
Between June 2024 and April 2025, PhonePe received summons from ED offices in Mumbai, Bengaluru, and Delhi regarding merchants Sutrulla Express and Dinero Payment Services. These inquiries fall under the Prevention of Money Laundering Act (PMLA), with investigators examining fund movement patterns.
“Our company has fully cooperated by providing all requested transaction records and documentation,” stated a PhonePe representative responding to media inquiries. “These matters exclusively concern third-party vendors and don’t involve PhonePe executives or operations directly.”
Legal Proceedings and Merchant Vetting
In May 2025, PhonePe sought legal protection against customer data disclosure requirements through a Karnataka High Court petition. The court upheld law enforcement’s authority to access transaction details during criminal investigations.
Company officials emphasize their merchant screening protocols: “We maintain multi-layered onboarding aligned with RBI regulations, including continuous transaction monitoring and risk-based interventions.” Sources within the payments industry note that such investigations typically require sharing KYC documentation and specific transaction histories.
Regulatory Changes and Compliance
The Reserve Bank of India implemented stricter KYC requirements in September 2025 following multiple cases involving payment platforms. This occurred after RBI auditors identified compliance gaps in PhonePe’s customer data management earlier that year, which the company claims to have resolved.
IPO Plans Proceed
Despite regulatory scrutiny, PhonePe continues preparations for a $1.5 billion public offering that could value the company at approximately $15 billion. The fintech firm recently filed updated prospectus documents with market regulators, maintaining its planned listing timeline.
