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Apple Pay's India launch starts at the country's fourth-largest card issuer
Reuters reports Apple Pay will arrive next month on Axis Bank credit cards, with the two larger issuers still unsigned. The Economic Times reported Apple asked for 15 to 20 basis points a transaction and banks countered at about 10.
The Product Desk · Product desk
What happened
- Three people familiar with the plans told Reuters that Apple Pay is expected to launch in India next month, starting with credit cards issued by Axis Bank.
- Apple has talked to HDFC Bank and ICICI Bank, both bigger card issuers than Axis, without settling commercial terms with either, Reuters reported.
- Axis is India's fourth-largest credit card issuer, with 16.26 million active cards as of July.
- Indian outlets that matched the October target also reported that UPI, which Reuters puts at about 84% of digital payment volume, is not supported at launch.
- The Reserve Bank of India's authentication directions, in force since April, let issuers offer device-native biometrics instead of requiring an SMS one-time password on every transaction.
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Why it matters
- constraint Without UPI, the addressable ceiling for this product is the non-UPI remainder of Indian digital payments, and Visa and Mastercard credit cards are only part of that remainder.
- decision Because Apple is signing issuers one at a time, every Indian bank now has to price its own deal, and HDFC and ICICI will negotiate against a live Axis launch.
- exposure Whether Face ID works at checkout will depend on which bank issued the card, so each issuer's support desk will field the per-bank confusion.
- cost The basis points under argument come out of issuer economics on every transaction, including the ones that would have completed on an SMS code without Apple in the flow.
The person Apple Pay reaches first in India carries an Axis Bank credit card and an iPhone. Apple and Axis have not announced a launch date, and Apple declined to comment to Reuters [15][2].
Price has been the open item since at least February, when Bloomberg reported that Apple was in talks with Indian banks [7]. The Economic Times put Apple's ask at 15 to 20 basis points of each transaction, against a bank counter of around 10 [9]. The distance between those positions is 5 to 10 basis points, which is 50% to 100% more than the banks offered [1]. On 1,000 rupees of card spend, the banks' number works out to 1 rupee and Apple's to 1.50 or 2 rupees [2].
The regulatory permission has been in place since April, when the Reserve Bank of India's authentication directions took effect [12]. Apple plans to widen the service through separate bank-by-bank agreements, the pattern it has followed in other markets [3]. The item still unsettled with HDFC Bank and ICICI Bank, according to Reuters, is commercial terms [4].
What ships next month is a card product. Indian outlets report no UPI support at launch [10], and everything that is not UPI shares at most 16% of digital payment volume [3]. Visa and Mastercard credit cards are part of that 16% [8].
Apple's share of the Indian smartphone market has doubled to 8% since 2022, a small slice of a very large market that skews toward the customers banks issue premium credit cards to, Reuters reported [14]. Those are the cardholders who currently wait for an SMS one-time password to arrive before a purchase goes through [12].
For an issuer weighing whether to match Axis, two measurements settle it. The first is the overlap between iPhone owners and your premium card portfolio, which you can count from your own book today. The second is whether device biometrics raise the share of attempted transactions that complete, against your own one-time-password baseline. Sign when the first is large and you have instrumented the second; the cost of signing early is that you pay basis points on transactions that would have completed on an SMS code anyway, and wallet installs will not separate the two. Ninety days after launch, the comparison worth making is completed-transaction rate on tokenized taps against the 10 to 20 basis points that were under discussion in August [9].
What to watch
- Whether HDFC Bank or ICICI Bank signs, and at what basis-point rate.
- Whether UPI support is added after the credit-card launch.
- Whether Apple or Axis Bank confirms a launch date.