One of Apple’s biggest services missing from India is Apple Pay, and with rumours of its imminent launch in the news cycle, it only raises hopes for millions of iPhone users. While Apple remains mum on the matter, industry analysts suggest that Apple Pay could kickstart the company’s goals of stepping into India’s vast fintech sector. Expected to make its debut by late September or October, analysts say that Apple wants to target India’s rapidly expanding base of premium smartphone users and credit cardholders.
If the rumour holds truth, Apple Pay will enter a market dominated by the Indian government’s UPI service, which allows for easier digital transactions. Major players like Paytm, PhonePe and Google Pay already dominate major chunks of the market. Where will Apple Pay fit in?
What is Apple Pay?
Apple Pay is Apple’s proprietary digital wallet service that’s integrated natively into iOS devices via the Apple Wallet app.
In the countries where it is active, Apple Pay relies on Near Field Communication (NFC) technology instead of pulling out a plastic card or unlocking an app to scan a QR code. Users double-click the side button on their iPhone or Apple Watch, authenticate using Face ID or Touch ID, and hold their device near a Point-of-Sale (PoS) terminal device to complete a payment.
Some of the benefits of Apple Pay include:
– Credit card numbers are never stored directly on the device or on Apple servers. Instead, a unique Device Account Number is encrypted and safely stored inside the device’s Secure Element chip.
– Every transaction is authorised with a one-time dynamic security code. Apple does not store transaction details that can be tied back to the individual buyer.
– Biometric verification via Face ID or Touch ID removes the need to enter multi-digit PINs at card terminals for routine transactions. This should make it easier than the UPI-based PIN input systems.
Apple Pay in India: How it can change things
For Indian iPhone users, digital payments have historically required third-party apps to scan QR codes, or manually enter card details for online purchases. Even for UPI-based systems, the payment verification system is rather more rudimentary.
In this case, Apple Pay integrates transaction systems within the iOS operating system.
As Prabhu Ram, Vice President – Industry Research Group, CyberMedia Research (CMR), states in a conversation with Financial Express Digital, this integration could change how iPhone users interact with their devices on a daily basis.
“With Apple Pay finally debuting in India, Apple users stand to benefit from Apple’s characteristic simplicity, security, and deep ecosystem integration,” Ram explains.
“Apple Pay could elevate the iPhone experience by bringing a more integrated payments experience to a market that already has one of the world’s most evolved digital payments ecosystems. It is all about making payments a more natural and seamless part of the broader Apple ecosystem,” he added.
By embedding payments directly into iOS, Indian users stand to gain several distinct advantages:
– Authorising a payment on a MacBook using Face ID on an iPhone, or completing a tap-to-pay purchase at a retail store directly from an Apple Watch, creates a cohesive multi-device payment system.
– In busy environments like departmental stores or coffee shops, tapping an Apple Watch or iPhone takes fractions of a second compared to opening a camera, scanning a QR code, and entering a PIN.
– Apple Pay could change the payments experience for credit card holders on iPhones. Users can leave physical card sleeves behind without sacrificing reward points or perks tied to premium cards.
Apple Pay in India: What to expect at launch
Initial focus on international credit card networks
At launch, Apple Pay in India will likely support only credit cards issued on major international networks like Visa and Mastercard. This strategy allows Apple to target high-spending, premium cardholders right out of the gate without waiting for deeper local platform integration.
May lack UPI support at the beginning
While UPI dominates India’s digital payment market, Apple Pay is unlikely to support it at launch. Integrating UPI requires separate approvals from the National Payments Corporation of India (NPCI) and a partnership with a local sponsor bank. These are barriers that Apple is still working to navigate before expanding the service’s capabilities.
A new cost model for merchants
Indian merchants and consumers won’t face extra fees for using Apple Pay. Instead, Apple is negotiating behind the scenes to receive a small cut (around 10 to 20 basis points) of the existing interchange fee that card-issuing banks earn on every transaction.