Apple Pay is likely to launch in India at the end of September or in October, opening the door to the country’s premium digital payments market.
Initially, Apple Pay will only support credit cards issued by global payment networks such as Visa and Mastercard. And, UPI payments may not be available at launch. For that, the company would first need approval from the National Payments Corporation of India (NPCI) and the sponsor bank to process UPI transactions.
The service is already available in more than 90 markets globally.
What iPhone users can and can’t do without UPI at launch?
To use Apple Pay, the users must first add their card details to Apple Wallet and use compatible Apple devices to make payments. In physical stores, Apple Pay uses NFC to enable contactless payments at compatible POS terminals.
The process will be similar to using Apple Pay in other countries. Instead of pulling out a physical card, users can authenticate a payment on their iPhone and tap it at the payment terminal.
However, they cannot link the bank account directly to Apple Pay, as is done while using UPI
Apple India is in talks with credit card issuers
Currently, Apple India is negotiating with credit card issuers over transaction fees. According to Business Standard, Apple is seeking 15–20 basis points per transaction, while some major banks are pushing for a 10-basis-point fee.
Apple has held advanced discussions with HDFC Bank, ICICI Bank and Axis Bank to provision cards for the service, according to people familiar with the rollout, cited by Gadgets Now.
Notably, the fee would not be charged to customers or merchants; rather, the banks would collect it from their revenue generated by card transactions.
The arrival of Apple Pay could also impact India’s credit card market.
Amrish Rau, Pine Labs’ CEO, said on the company’s quarterly earnings call that credit card payments are already growing by 10-15 per cent. But the introduction of Apple Pay may also boost credit card payments.
What’s holding back Apple Pay and UPI integration?
One reason Apple Pay is likely to launch with UPI is the disagreement over authentication.
Apple Pay relies on Face ID or Touch ID to authorise payments, while UPI’s authentication framework depends on India’s banking and identity infrastructure.
According to Gadgets Now sources, Apple wants its device-level biometric authentication system to play a central role, while NPCI’s requirements involve UIDAI-backed authentication. The two sides are yet to resolve the issue.
Apple’s NFC system could also be a challenge. On iPhones, NFC payments are closely linked to Apple Pay, while India’s digital payments system allows different apps and services to work together, an Economic Times report said
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.