Apple Pay is launching in India today, teaming up with Axis Bank as its first banking partner. This marks Apple’s entry into the world’s most populous country after several years of absence in a market largely dominated by the Unified Payments Interface (UPI).
The initial rollout will be limited. Apple Pay will support eligible Axis Bank cards on Visa and Mastercard, but it will not include India’s local RuPay network. Furthermore, acceptance will only extend to merchants and payment terminals that have been enabled for the service, which may restrict where payments can be made.
In contrast to the UPI system, which allows users to conduct instant bank-to-bank transactions without needing cards, Apple Pay operates on a card-based model. This requires individual issuers and their payment infrastructure to integrate with the service, complicating a broader rollout. Additionally, there are challenges related to commercial terms. Apple is reportedly seeking a fee of about 20 basis points on transactions, which significantly reduces the typical 40 to 50 basis points margin found in the payments layer. This pricing model aligns with Apple Pay’s structure in other markets, but HDFC Bank, ICICI Bank, and SBI Card are not expected to support the service at launch as they continue to negotiate terms.
Entering the Indian payments landscape presents a stark contrast to Apple’s experience in the U.S., where card payments are the norm. India’s digital payments boom has been primarily driven by UPI, which facilitates direct transfers from bank accounts and has made scanning QR codes for payments a common practice. Apple Pay, however, will initially target a much smaller card-based payment segment.
Despite the potential hurdles, Apple Pay may resonate with India’s growing population of iPhone users, who typically have higher incomes and are more likely to use premium credit cards. This demographic could make it difficult for banks to ignore Apple Pay, even with UPI’s strong presence in the market.
While Apple Pay may initially cater to a niche market, the transaction fees could provide Apple with another way to monetize its expanding user base in India. Eligible Axis Bank customers will be able to add their credit cards to Apple’s Wallet app and use Apple Pay for online transactions and contactless payments at supported terminals. However, an Apple Pay transaction might succeed at a terminal operated by an independent payments provider that supports it while failing at another terminal that does not have the service enabled. This could lead to uneven acceptance during the initial launch, impacting users with supported cards.
This launch adds another piece to Apple’s growing business in India, where it has been focusing on boosting iPhone sales, local manufacturing, and expanding its retail footprint. In 2025, Apple accounted for 28% of India’s smartphone market by value, up from 23% the previous year, according to Counterpoint Research. India’s contribution to global iPhone production is already significant, making up around a quarter of total output, and this could rise to 30% to 35% in the next five years, as reported by Business Standard.
