Apple Pay Likely To Launch In India By October: Report

Apple Pay is likely to launch in India by late September or October, giving the iPhone maker a foothold in the country’s lucrative premium credit-card market. 

According to a Business Standard report, citing sources, Apple Pay will initially support credit cards issued on global payment networks such as Visa and Mastercard.

The service is unlikely to initially support UPI payments at launch, the report said. Apple would need approval from the National Payments Corporation of India (NPCI), which operates the UPI network, as well as a partnership with a sponsor bank to route UPI transactions.

Inc42 has reached out to Apple seeking comments on the development. The story will be updated based on their response.

Apple has been in talks with some of India’s largest credit card issuers over the fee it would earn on transactions processed through Apple Pay, once it is launched in the country. 

The company is reportedly seeking a 15-20 basis points (bps) share of the interchange fee on each credit card transaction, while some major card issuers have proposed a lower fee of around 10 bps.

Apple Pay is expected to be rolled out in phases in India.

In the first phase, the service is likely to focus on card-based contactless payments. Users would be able to add eligible debit or credit cards to Apple Wallet and use an iPhone or Apple Watch to make payments at NFC-enabled point-of-sale (PoS) terminals.

Apple Pay allows users to store eligible credit and debit cards in Apple Wallet and make contactless payments at PoS terminals using NFC. The service is available in more than 90 markets globally.

The potential launch could also boost credit card usage in India. 

“We do believe Apple Pay will enter the market before the end of this year,” Pine Labs CEO Amrish Rau said during the company’s Q1 earnings call. Rau said a more diversified mix of payment methods could benefit Pine Labs as credit card usage grows alongside UPI.

At present, cards issued in India cannot be added to Apple Wallet for Apple Pay transactions. The initial rollout could therefore focus on premium credit cards issued on global networks such as Visa and Mastercard.

Apple Pay’s Long Road To India

Apple’s reported India launch comes nearly a decade after the company first indicated that it wanted to bring Apple Pay to the country.

Earlier, in 2017, Apple senior VP Eddy Cue said the company “definitely” wanted to launch Apple Pay in India while speaking at Apple’s development centre in Hyderabad. Cue did not announce a specific launch timeline at the time, saying only that Apple Pay was expected to come to India in the future.

However, the launch plans subsequently ran into regulatory and technical hurdles.

By late 2018, Apple had reportedly put its plans for a UPI-based payments service in India on hold. The company had held discussions with leading banks and NPCI but was concerned about the RBI’s data localisation requirements.

Apple also faced technical and design challenges related to how payments would flow through the UPI ecosystem.

At the time, Apple’s proposed payments service was expected to rely heavily on UPI, something that doesn’t seem to be on the anvil for the service. 

The potential launch comes as Apple expands its services business in India. In July, Apple also reportedly resumed accepting credit and debit card payments for App Store purchases and subscriptions such as iCloud in India, nearly four years after withdrawing the option following RBI regulatory changes.

The move followed its compliance with the RBI’s card tokenisation framework, which requires merchants to replace stored card details with unique tokens issued by authorised card networks and store tokenised data locally in India.

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