Apple Pay Sets to Enter India by October

Synopsis

According to Media Reports, Apple Pay is set to launch in India by October 2026, granting the company access to the high-end credit card market in India. Initially, only Visa and Mastercard credit cards will be supported by the service, while integration with UPI will be implemented after approval by the regulators and a partnership with a sponsor bank.

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A 6-year wait is nearing its conclusion

Apple Pay, the iPhone maker's digital payments service, will be available in India by October and will provide the tech giant with a cut in every transaction, three sources told Business Standard. For one thing, Apple Pay will work with credit cards on foreign networks like Visa and Mastercard, operating on the same basis as other markets around the world.

The UPI Gap

The biggest restriction is that the major payment channel in India — the payment rails — wasn't included at launch. At the time of the launch, Apple Pay will not support Unified Payment Interface (UPI). If Apple wants to offer UPI, then it would have to be has to get clearance from an organisation called the National Payments Corporation of India (NPCI) and would need to tie up with a sponsor bank to facilitate the routing of such transactions.

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This is a critical exception (qualifying condition, restriction that has an impact on the scope) in India where the majority of P2M transactions are already on the UPI network and not on cards.

On-going Negotiations with banks for fees

Apple has been working with large credit card companies on interchange fees, which would not affect customers or merchants but rather would be deducted from the banks and they would be paid from the profits they make on card transactions.

Apple has been demanding 15-20 basis points (bps) on every credit card transaction from banks and some major banks have been asking for a lower rate of 10 bps. The interchange fee is the fee that a merchant's bank receives from the bank that issued the credit card in order to process the credit card transaction, which makes up the merchant discount rate.

What Users Can Expect

There is no public announcement by Apple about the date, so it is a good indication of the industry. Users who have compatible cards can add them to Apple Wallet at launch and contactless pay with their iPhone or Apple Watch; availability will depend on the participating banks and card networks.

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The Bigger Picture

Payments industry observers say that Apple Pay might spur greater credit card transactions in India even before the launch of UPI, as the app could enable one-tap payments at stores, apps and websites.

With digital payments already being heavily dominated by a zero-cost model in India, Apple Pay's introduction will see if a premium, fee-earning option can make headway in a nation of the rich and iPhone-owning masses, and if NPCI will allow the UPI rail to be conducted by the world's most valuable consumer tech firm.