R. Yitzchak says: On the upper arm or on your hand (i.e., your palm), literally? It is, therefore, written (Devarim 11:18) "And you shall place these words upon your heart" — what is aligned with your heart, i.e., the upper arm.
Rabbi Yitzchak Places Tefillin Near the Heart Based on Scripture
Mekhilta Tractate Pischa 17:25