Apple Pay Set to Launch in India Next Month, Initially Supporting Credit Cards Only

Apple seems to be taking India seriously. On the heels of launching the iPhone 18 Pro series along with the iPhone Duo, Apple is now interested in bringing Apple Pay to India. Note that Apple hasn’t confirmed this yet, and the intel comes from renowned industry analyst Mark Gurman, whose columns on Bloomberg have given us a steady track of Apple’s future product plans. In his latest one, the Cupertino-based giant is finally preparing to launch its long-awaited contactless payment service in India as soon as next month. Apple , however, is taking a distinctly unconventional path for launching its services in the world’s fastest-growing digital payments market. Apple Pay is said to be launching initially with traditional credit cards, bypassing India’s dominant Unified Payments Interface (UPI). Based on reports from Bloomberg’s Mark Gurman and other industry sources, the iPhone maker is finalising bank-by-bank agreements. Gurman says that Apple is partnering with Axis Bank as its premier partner for launch, following which the company will likely rope in major card issuers including HDFC Bank and ICICI Bank. Apple Pay’s entry into India has faced years of delays, primarily emerging from strict local data storage mandates and Reserve Bank of India (RBI) authentication rules. Historically, Indian regulation has required a two-factor authentication process relying on SMS one-time passwords (OTPs) for every domestic card transaction. This requirement countered Apple Pay’s core user experience, which relies on seamless, device-native biometrics like Face ID and Touch ID to approve payments at the Point of Sale (POS). The bottleneck, however, was cleared following the RBI’s updated framework on digital payment authentication, which went into effect earlier this year. Under the revised guidelines, card issuers can offer alternative authentication mechanisms, allowing device-native biometrics to meet regulatory requirements without triggering an SMS OTP. UPI, developed by the National Payments Corporation of India (NPCI), accounts for roughly 84% of all digital transaction volumes in the country. Third-party apps like Google Pay, PhonePe, and Paytm process billions of consumer-to-merchant and peer-to-peer transactions every month via QR codes and linked bank accounts. However, UPI operates under a Zero Merchant Discount Rate (MDR) policy for standard bank-to-bank transfers, meaning payment apps earn no transaction fees from merchants or banks on these transactions. Apple Pay’s business model, on the other hand, depends on transaction fee sharing. Internationally, Apple collects a small fee of typically 10 to 20 basis points from the issuing bank for every credit or debit card transaction made through Apple Wallet. By prioritising credit card tokenisation over standard UPI transfers, Apple can secure commercial terms with card networks (Visa and Mastercard) and issuing banks, catering directly to the affluent segment of Indian consumers who favour reward-bearing credit cards for high-value retail purchases. While Apple Pay is initially said to operate without UPI support, industry experts believe that it could eventually support the country’s favourite digital payment system. Competitors such as Google Pay and Samsung Pay have integrated both worlds, i.e., offering NFC card tokenisation for premium users and UPI payments for universal acceptance across street vendors and large retailers alike. Furthermore, with recent NPCI initiatives allowing credit cards (such as RuPay) to be linked to UPI IDs, the boundary between card transactions and UPI continues to blur. When Apple Pay goes live in the coming weeks, iPhone users will be able to store tokenised credit cards in their Apple Wallet app and tap their devices at contactless POS terminals.