The launch comes after years of speculation about Apple’s plans for the world’s most populous country. Unlike India’s ubiquitous UPI system, which enables instant bank-to-bank payments via QR codes, Apple Pay is card-based and requires individual issuers and payment infrastructure providers to integrate with the service. This makes broad adoption more complex. Apple is seeking a fee of about 20 basis points per transaction, a significant portion of the roughly 40 to 50 basis points margin in the payments layer, according to people familiar with the matter. HDFC Bank, ICICI Bank, and SBI Card are not expected to support Apple Pay at launch as negotiations over commercial terms continue. Apple, Axis Bank, and the other banks did not respond to requests for comment. Earlier this month, Reuters reported that Apple was preparing to launch Apple Pay in India in October, starting with Axis Bank credit cards. Apple Pay is entering a market where UPI handles the bulk of digital payments. However, Apple Pay could appeal to India’s growing base of more affluent iPhone users who are more likely to use premium credit cards. The transaction fee would give Apple another way to monetise its users in India. At launch, eligible Axis Bank customers can add credit cards to Apple Wallet and use Apple Pay for online purchases and contactless payments at supported terminals. Acceptance may be uneven because a transaction may work at a terminal operated by an independent payments provider that has enabled the service but fail at another terminal whose acquiring bank has not. The launch adds to Apple’s growing business in India, where it has been expanding iPhone sales, local manufacturing, and retail footprint. Apple accounted for 28 percent of India’s smartphone market by value in 2025, up from 23 percent a year earlier.
Apple Pay launches in India with Axis Bank, limited rollout sidesteps UPI dominance
Initial support only for Axis Bank Visa and Mastercard cards; major banks hold out over fee negotiations
Analysis
Why This Matters
- Indian iPhone users will gain access to Apple Pay, a convenient contactless payment method, but only a small subset with Axis Bank cards can use it initially.
- The launch challenges UPI’s near-total dominance in India’s digital payments ecosystem, though Apple Pay remains a card-based niche service.
- Apple’s fee demands could set a precedent for payment partnerships in India and affect how other global players approach the market.
Background
India’s digital payments revolution has been driven by UPI, a real-time bank-to-bank system that bypasses card networks. UPI processes the vast majority of digital transactions, making card-based services like Apple Pay a small part of the market. Apple has been deepening its presence in India through expanded iPhone sales, local manufacturing, and retail stores, and now seeks to monetise its user base through payment fees.
Key Perspectives
Apple: Sees India as a growth market and wants to charge a 20-basis-point fee on each transaction, similar to its model elsewhere. Axis Bank: First-mover advantage by partnering with Apple, potentially attracting premium customers. Other major banks (HDFC, ICICI, SBI Card): Negotiating over Apple’s commercial terms; their absence limits Apple Pay’s reach. Critics/Skeptics: Apple Pay’s card-based model and limited acceptance make it a marginal player against free, instant UPI payments. The 20-bps fee may deter banks from joining.
What to Watch
- Whether HDFC Bank, ICICI Bank, and SBI Card eventually sign on after fee negotiations.
- Expansion of acceptance to more merchants and payment terminals, including those using RuPay.
- Potential regulatory or competitive responses from India’s National Payments Corporation to protect UPI’s dominance.