Apple will launch Apple Pay in India later on Tuesday, with Axis Bank as the first batch of banking partners. This means that Apple will bring its payment services to the world's most populous country after a multi-year absence, while the Indian payment market has long been dominated by UPI.
According to informed sources, the initial rollout will be relatively limited. Apple Pay will initially support eligible Axis Bank Visa and Mastercard cards, but not the local Indian RuPay network. Only merchants and payment terminals that have already enabled this service will accept Apple Pay.
Unlike the ubiquitous unified payment interface in India ( UPI ), UPI allows consumers to perform instant bank-to-bank transfers without relying on bank cards; Apple Pay, on the other hand, is based on bank cards and requires separate card-issuing institutions and payment infrastructure providers to access the service. This makes widespread promotion more complicated. People familiar with the matter say that Apple's business terms have also become a point of contention for some large Indian banks.
Insiders say that Apple hopes to charge a fee of about 20 basis points in this transaction, which would significantly erode the profit margin of about 40 to 50 basis points in the payment process. The insiders indicated that this fee structure is generally consistent with Apple Pay's business model in other markets. Another insider told TechCrunch that HDFC Bank, ICICI Bank, and SBI Card are not expected to support Apple Pay at launch, as negotiations regarding the commercial terms are still ongoing.
Apple, Axis Bank, HDFC Bank, ICICI Bank, and SBI Card have not responded to requests for comments. Reuters reported earlier this month that Apple is preparing to launch Apple Pay in India in October, starting with Axis Bank credit cards.
Apple Pay Entering a payment market that is distinctly different from those dominated by American and other bank cards. The prosperity of digital payments in India is mainly driven by UPI, a government-supported system that allows consumers to transfer funds directly between bank accounts.
UPI handles the majority of digital payments in India. In India, scanning QR codes to make payments directly from bank accounts has become the norm. In contrast, Apple Pay initially only targeted a much smaller market for bank card payments.
However, Apple Pay may attract India's growing iPhone user base, which is typically wealthier and more likely to use high-end credit cards. Despite the dominant position of UPI, such customers could still make it difficult for banks to ignore this service.
Even though Apple Pay is still a niche service, its economic significance could be significant for Apple. According to insiders, the transaction fees charged by the manufacturer of iPhone will provide another means of monetization for its growing user base in India.
According to informed sources, when it is launched, eligible Axis Bank customers will be able to add their credit cards to Apple's Wallet app and use Apple Pay for online shopping as well as contactless payments on supported devices.
According to an informed source, Apple Pay transactions may be available on terminals of independent payment service providers that have enabled this service, but may fail on other terminals where the acquiring banks have not activated this service. This means that even if customers possess supported cards, the initial acceptance range may not be uniform.
This launch adds another piece to Apple's continuously expanding business in India. Apple has been working to increase iPhone sales, local manufacturing, and retail presence. According to earlier reports from Counterpoint Research, Apple is expected to account for 28% of the Indian smartphone market by value in 2025, up from 23% a year ago.
India currently accounts for about one-quarter of the global iPhone production. Last month, Business Standard cited a report by an Indian government official stating that this proportion may rise to 30% to 35% in the next five years.
