Apple Pay Launches in India with Initial Axis Bank Partnership

Apple has officially launched its Apple Pay service in India, according to TechCrunch. The initial phase of the rollout sees the service partnered with Axis Bank, the country's third-largest private bank.

The Indian payment market is heavily dominated by the government-backed Unified Payments Interface (UPI) system, which allows for instant bank account transfers without the need for cards. In contrast, Apple Pay relies on bank cards, requiring integration with card issuers and payment infrastructure providers.

At launch, Apple Pay will only support eligible Visa and Mastercard cards from Axis Bank and will not function with India's domestic RuPay network. Furthermore, only select merchants and payment terminals are equipped to accept Apple Pay. Reports suggest Apple is seeking a transaction fee of approximately 0.2%, which represents a significant portion of the profit margin in the payment chain.

Negotiations regarding commercial terms are ongoing with several major Indian banks, including HDFC Bank, ICICI Bank, and SBI Card, which are therefore not included in the initial launch. Despite UPI's market dominance, Apple Pay aims to attract India's growing iPhone user base, who typically have higher incomes and a propensity to use premium credit cards.

Apple's expansion in India extends beyond payment services, including increased iPhone sales, local manufacturing, and the opening of retail stores. India already accounts for a significant share of Apple's global iPhone production, a figure expected to grow in the coming years.