According to reports from Gadgets Now by Times of India and Mint, Apple Pay is set to launch in India by October 2025, initially supporting tokenized Visa and Mastercard credit and debit cards using the same framework that operates in other global markets. The service will allow iPhone and Apple Watch users to make contactless payments at point of sale terminals using near field communication (NFC) technology. However, UPI integration is expected to come at a later stage due to ongoing technical discussions with the National Payments Corporation of India (NPCI) and challenges around biometric authentication. Apple has held advanced discussions with HDFC Bank, ICICI Bank and Axis Bank to provision cards for the service, as reported by sources familiar with the rollout.
The absence of UPI at launch stems from significant technical differences between Apple's authentication system and India's payment infrastructure. As reported by Gadgets Now, Apple wants its device-level biometric authentication system (Face ID or Touch ID) to play a central role, while NPCI's requirements involve UIDAI-backed authentication. The two sides have yet to fully resolve these technical differences, with pending discussions around biometric authentication frameworks. Additionally, Apple's NFC architecture is closely tied to Apple Pay, while India's digital payments ecosystem is built around interoperability between different payment applications and services.
As reported by ETTech and Business Standard, Apple globally charges around 0.15-0.20%, or 15-20 basis points, of transaction value for Apple Pay, but faces significant pricing challenges in India's market. In India, credit card transactions operate at much lower rates, while UPI transactions are processed at zero cost. Two bankers cited by ETTech in May stated that pricing negotiations could be a key challenge for Apple's India launch, with the company potentially having to significantly lower its global rates to fit India's payment economics. Apple has been negotiating with India's largest credit card issuers over transaction fees for several months, seeking 15-20 basis points share of interchange fee while major credit card issuers push for 10 bps. Notably, the fee would not be charged to customers or merchants; rather, the banks would collect it from their revenue generated by card transactions.
According to Mint, the reported October launch will open the door to India's premium digital payments market, with users able to add card details to Apple Wallet and use compatible Apple devices for contactless payments at compatible POS terminals. However, users cannot link bank accounts directly to Apple Pay as is done with UPI, representing a significant limitation for India's digital payments ecosystem. The arrival of Apple Pay could impact India's credit card market, with credit card payments already growing by 10-15% according to Pine Labs' CEO Amrish Rau. While this represents a relatively small share of India's smartphone market, iPhone users tend to be concentrated in the premium segment, making them a potentially attractive customer base for banks and card networks.
