Key facts
- Apple Pay has launched in India, with Axis Bank as its initial banking partner.
- The service will initially support eligible Axis Bank credit cards on Visa and Mastercard.
- Apple is seeking a transaction fee of about 20 basis points.
- HDFC Bank, ICICI Bank, and SBI Card are not expected to support Apple Pay at launch.
- India's digital payments market is largely dominated by the UPI system.
Apple Pay has officially launched in India, marking its entry into one of the world's largest and fastest-growing digital payments markets. The service is rolling out on Tuesday with Axis Bank serving as the initial banking partner, supporting eligible Axis Bank credit cards on Visa and Mastercard networks. However, Apple Pay will not initially support India's domestic RuPay network, and its acceptance will be limited to merchants with compatible payment terminals.
The launch comes after years of Apple navigating the unique landscape of Indian digital payments, which is overwhelmingly dominated by the Unified Payments Interface (UPI). UPI, a state-backed system, facilitates instant bank-to-bank transfers, a model that differs significantly from Apple Pay's card-based approach. This fundamental difference, along with ongoing negotiations over commercial terms, has complicated a broader rollout.
Sources familiar with the matter indicate that Apple is seeking a transaction fee of approximately 20 basis points, a figure that represents a substantial portion of the typical margin in the payments layer. This fee structure is reportedly consistent with Apple's global model. Major banks such as HDFC Bank, ICICI Bank, and SBI Card are not expected to be part of the initial launch as discussions over these terms continue.
Despite UPI's dominance, Apple Pay could find traction among India's growing base of affluent iPhone users who are more likely to use premium credit cards. The service offers Apple another avenue to monetize its user base in the country. The expansion of Apple Pay is part of Apple's broader strategy to grow its business in India, which includes increasing iPhone sales, local manufacturing, and its retail presence.