Apple Pay Finally Arrives in India: A New Chapter in Digital Payments

After years of anticipation, Apple’s payment service launches with Axis Bank as its first partner, but challenges remain in a UPI dominated market

The Wait Is Over

Apple has officially launched Apple Pay in India, marking a significant milestone for the tech giant’s expansion into the world’s most populous country. After years of delays and speculation, the service began rolling out on Tuesday with Axis Bank, the country’s third largest private sector lender, as its inaugural banking partner.

The launch represents Apple’s long awaited entry into a digital payments market that has been fundamentally transformed by the state backed Unified Payments Interface (UPI). While Apple Pay’s arrival signals growing maturity in India’s premium smartphone segment, it also faces unique challenges in a market where QR code based bank transfers have become second nature to millions of consumers.

A Limited but Strategic Launch

The initial rollout is notably constrained. Apple Pay will support eligible Axis Bank cards on the Visa and Mastercard networks, but will not include India’s homegrown RuPay network, a notable omission given RuPay’s growing prominence in the domestic market. Acceptance will also be limited to merchants and payment terminals that have been specifically enabled for the service.

This measured approach reflects the complexity of India’s payments infrastructure, which differs markedly from the card heavy economies of the United States and other Western markets. Unlike UPI, which enables instant bank to bank transfers without relying on cards, Apple Pay is fundamentally card based. This means individual issuers and payment infrastructure providers must integrate with the service before it can achieve widespread adoption.

The Commercial Terms Debate

One of the key sticking points in Apple Pay’s Indian rollout has been the commercial terms Apple is seeking. According to sources familiar with the negotiations, Apple is requesting a fee of approximately 20 basis points (0.2%) on transactions, a significant portion of the roughly 40 to 50 basis points (0.4% to 0.5%) of margin available in the payments layer.

While this fee structure is broadly consistent with Apple Pay’s commercial model in other markets, it has reportedly created friction with some of India’s largest banks. HDFC Bank, ICICI Bank, and SBI Card, three of the country’s most prominent financial institutions, are notably absent from the launch, with negotiations over commercial terms still ongoing.

Neither Apple, Axis Bank, HDFC Bank, ICICI Bank, nor SBI Card responded to requests for comment on the launch.

Navigating a UPI Dominated Landscape

Apple Pay enters a payments ecosystem that bears little resemblance to the markets where it has previously thrived. India’s digital payments revolution has been driven overwhelmingly by UPI, which handles the bulk of digital transactions in the country. For millions of Indians, scanning a QR code to pay directly from their bank account has become the default method of transacting.

In this context, Apple Pay initially addresses a much smaller, albeit potentially lucrative, card payments market. However, the service could find its niche among India’s growing base of iPhone users, who tend to be more affluent and more likely to use premium credit cards. This demographic could make the service difficult for banks to ignore, despite UPI’s dominance.

Even if Apple Pay remains a relatively niche service in terms of transaction volume, the economics could still make India meaningful for Apple. The transaction fees would provide another revenue stream from the company’s expanding iPhone user base in the country.

How It Works

At launch, eligible Axis Bank customers can add their credit cards to Apple’s Wallet app and use Apple Pay for:

Online purchases at participating merchants
Contactless payments at supported physical terminals

However, the experience may be uneven during the initial rollout period. A transaction might succeed at a terminal operated by an independent payments provider that has enabled the service, but fail at another terminal whose acquiring bank has not yet integrated Apple Pay. This inconsistency could prove frustrating for early adopters, even those with supported cards.

Part of a Broader India Strategy

The Apple Pay launch adds another dimension to Apple’s growing presence in India, where the company has been aggressively expanding on multiple fronts:

iPhone sales have been growing steadily
Local manufacturing now accounts for approximately a quarter of global iPhone production
Retail footprint continues to expand with physical Apple Stores

According to Counterpoint Research, Apple accounted for 28% of India’s smartphone market by value in 2025, up from 23% a year earlier. Additionally, Business Standard reported last month, citing an Indian government official, that India’s share of global iPhone production could rise to 30% to 35% over the next five years.

Looking Ahead

While Apple Pay’s Indian debut is modest in scope, it represents a strategic foothold in a market with immense long term potential. The coming months will be crucial as Apple works to bring more banks on board, negotiate commercial terms with reluctant partners, and expand acceptance across India’s fragmented payments infrastructure.

For now, Axis Bank customers with eligible Visa and Mastercard credit cards can begin using the service. Whether Apple Pay can carve out a meaningful space in a market defined by UPI remains to be seen, but for Apple, this launch is about planting a flag in one of the world’s most important and rapidly evolving digital economies.

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