Apple is set to launch Apple Pay in India later Tuesday with Axis Bank as its initial banking partner, TechCrunch has learned, bringing its payments service to the world’s most populous country after years on the sidelines of a market dominated by UPI. The initial rollout will be limited, according to people familiar with the matter. Apple Pay will initially support eligible Axis Bank cards on Visa and Mastercard, but not India’s homegrown RuPay network.
Acceptance will also be restricted to merchants and payment terminals that have been enabled for the service. Unlike India’s ubiquitous Unified Payments Interface (UPI) system, which lets consumers make instant bank-to-bank payments without relying on cards, Apple Pay is card-based and requires individual issuers and payment infrastructure providers to integrate with the service. This makes a broad rollout more complex.
Apple’s commercial terms have also emerged as a sticking point with some of India’s largest banks, the people said. Apple is seeking a fee of about 20 basis points on transactions, according to the people, a significant bite out of the roughly 40 to 50 basis points of margin in the payments layer. The fee structure is broadly consistent with Apple Pay’s commercial model in other markets, the people said.
HDFC Bank, ICICI Bank, and SBI Card are not expected to support Apple Pay at launch as negotiations over commercial terms continue, one of the people told TechCrunch. Apple, Axis Bank, HDFC Bank, ICICI Bank, and SBI Card did not respond to requests for comment. Earlier this month, reported that Apple was preparing to launch Apple Pay in India in October, starting with Axis Bank credit cards.
Apple Pay is entering a payments market that looks markedly different from the U.S. and other card-heavy economies. India’s digital payments boom has been driven largely by UPI, the state-backed system that lets consumers move money directly between bank accounts. UPI handles the bulk of digital payments in India, where scanning a QR code to pay directly from a bank account has become commonplace.
Apple Pay, by contrast, will initially address a much smaller card payments market. Nevertheless, Apple Pay could appeal to India’s growing base of iPhone users, who tend to be more affluent and are more likely to use premium credit cards. Those customers could make the service hard for banks to ignore, despite UPI’s dominance.
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