Apple started rolling out Apple Pay in India on Tuesday, as TechCrunch was the first to report. Its first banking partner is Axis Bank, the country’s third largest private bank. The move brings the company’s payment services to the world’s most populous country after years of delay in a market dominated by the United Payments Interface (UPI).
The initial launch is limited. Apple Pay supports Visa and Mastercard eligible Axis bank cards, but not India’s RuPay network. Acceptance will also be limited to stores and payment points that have already opened.
Unlike the Unified Payments Interface (UPI) system in India, which allows consumers to make instant bank-to-bank payments without relying on cards, Apple Pay is card-based and requires individual card issuers and payment infrastructure providers to integrate with the service. This makes the wide release very complicated. Apple’s trade terms have become a sticking point with some of India’s biggest banks, the people said.
Apple is looking for a fee of about 20 basis points (0.2%) on transactions, according to the people, a significant bite from about 40 to 50 basis points (0.4% to 0.5%) of the margin in the payment layer. The fee structure is broadly consistent with Apple Pay’s business model in other markets, the people said. HDFC Bank, ICICI Bank, and SBI Card did not support Apple Pay at launch while negotiations on commercial terms continued, one of the people told TechCrunch.
Apple, Axis Bank, HDFC Bank, ICICI Bank, and SBI Card did not respond to requests for comment on the launch. Earlier this month, Reuters report That Apple is preparing to launch Apple Pay in India in October, starting with Axis Bank credit cards.
Apple Pay has entered a payment market that is different from the United States and other countries with card-heavy economies. India’s growth in digital payments has been fueled largely by UPI, a state-sponsored system that allows consumers to move money directly between bank accounts.
UPI Handle most digital payments In India, where scanning a QR code to pay directly from a bank account has become commonplace. Apple Pay, on the other hand, initially addressed the smaller card payment market.
However, Apple Pay could appeal to India’s growing iPhone user base, who tend to be affluent and often use premium credit cards. Those customers can make the service difficult for banks to ignore, despite UPI’s dominance.
Although Apple Pay remains a niche service, the economics could still make India meaningful for Apple. The transaction fee the iPhone maker will charge will give it another way to monetize the growing iPhone user base in the country, the people said.
At launch, eligible Axis Bank customers can add their credit cards to Apple’s Wallet app and use Apple Pay for online purchases as well as contactless payments at supported terminals, the people said.
Apple Pay transactions can work at terminals operated by independent payment providers that have enabled the service but fail at other terminals not purchased by the bank, one of the people said. That can cause uneven acceptance during the initial launch, even for customers with supporting cards.
The launch adds another layer to Apple’s growing business in India, where it has expanded iPhone sales, local manufacturing and its retail locations. Apple accounts for 28% of the Indian smartphone market by 2025, up from 23% the previous year. previously reported by Counterpoint Research.
India accounts for about a quarter of the world’s iPhone production, and that share may increase to 30% to 35% Over the next five years, the Indian English Daily Business Standard reported last month, citing Indian government officials.
UPDATE: This story, originally published Tuesday morning, has been updated to reflect that the launch is underway.
When you purchase through a link in our article, we may receive a small fee. This does not affect the independence of our editors.
