Apple could launch its Apple Pay service in India as early as next month, with Axis Bank expected to be its first banking partner, according to a Reuters report citing sources.
The service may initially support Axis Bank credit cards, with Apple planning to add more banks later. The company has also held talks with HDFC Bank and ICICI Bank, but discussions with the two lenders over commercial terms are still ongoing.
Apple is expected to follow a phased approach in India, signing separate agreements with banks and adding more lenders over time. This approach is similar to how Apple Pay was introduced in other countries.
The possible launch would end Apple’s long wait to bring its payments service to India. Apple first indicated plans to introduce Apple Pay in the country in 2017. However, regulatory requirements, data localisation rules and technical challenges related to UPI integration delayed the rollout.
Apple Pay allows users to make contactless payments using an iPhone or Apple Watch. Users can store tokenised card details on their devices and authenticate payments through Face ID, Touch ID or a device passcode.
A change in payment rules by the Reserve Bank of India also helped create a path for services such as Apple Pay. The RBI allowed alternative authentication methods, including biometrics, for card payments, making it possible to use features such as Face ID and Touch ID with eligible Indian bank cards.
Axis Bank is currently one of India’s largest credit card issuers. It had around 16.26 million active credit cards in circulation as of July, according to the information provided.
However, Apple Pay would initially have a limited user base because the service would be available only to Apple device users with cards from participating banks.
Apple Pay will also enter a market where UPI dominates digital payments. UPI accounts for around 84% of India’s digital payment volumes. UPI also supports contactless payments through UPI Tap & Pay, but these transactions are processed through the UPI network.
Apple has reportedly discussed the India launch with other major banks as well as card networks such as Visa and Mastercard. One key issue has been the sharing of transaction fees.
According to reports, Apple has sought a share of around 15 to 20 basis points from interchange fees on Apple Pay transactions, while some banks have proposed a lower share of about 10 basis points.
Apple has not yet publicly confirmed the India launch.
