Apple Pay Launches in India with Axis Bank Partnership
iPhone maker enters India's UPI-dominated payments market with limited card-based rollout.
1Limited market entry
Apple Pay launched in India through an exclusive partnership with Axis Bank, the country's third-largest private lender. The service initially supports only Visa and Mastercard credit cards issued by Axis Bank, excluding India's domestic RuPay network. Unlike India's dominant UPI system which enables direct bank transfers, Apple Pay requires card infrastructure. Acceptance is restricted to specific merchants and payment terminals enabled for the service, including major brands like Zomato and Reliance.
2Commercial terms hurdle
Apple is charging banks approximately 20 basis points (0.2%) per transaction, consuming nearly half the typical 40-50 basis point margin in India's payments layer. This fee structure mirrors Apple's global model but has delayed participation from major banks like HDFC, ICICI and SBI Card. Negotiations continue as banks weigh the cost against potential benefits from serving iPhone users who tend to be higher-income customers more likely to use premium credit cards.
3UPI dominance challenge
Apple Pay enters a market where UPI processes over 80% of digital payments through direct bank transfers. UPI's QR code payments have become ubiquitous across India's merchant ecosystem. In contrast, Apple Pay initially addresses India's smaller card payments market. The service requires individual integration with each bank and payment processor, making nationwide rollout complex compared to UPI's standardized infrastructure backed by the Indian government.
4Strategic merchant partnerships
Apple has partnered with major payment processors including Razorpay, Paytm and Pine Labs to enable acceptance at millions of terminals. Key merchant partners span e-commerce (Blinkit, Tata 1mg), retail (Croma), and food delivery (Zomato). However, acceptance will be inconsistent initially as terminals must be specifically enabled for Apple Pay. A transaction may work at one merchant but fail at another depending on their payment provider's integration status.
5iPhone user monetization
With iPhone users representing India's affluent demographic, Apple Pay offers a new revenue stream beyond hardware sales. Apple captured 28% of India's smartphone market by value in 2025, up from 23% in 2024. Transaction fees from Apple Pay could become meaningful as India accounts for 25% of global iPhone production, potentially growing to 30-35% in five years. The service complements Apple's expanding retail and manufacturing presence in India.
6Technical implementation
Eligible Axis Bank customers can add credit cards to Apple Wallet for online and contactless payments. The service relies on NFC technology at enabled terminals, unlike UPI's QR code system. Each transaction requires coordination between Apple, the card issuer (Axis Bank), the merchant's payment processor, and the acquiring bank. This multi-party integration creates potential points of failure during the initial rollout phase.
7Market differentiation
Apple Pay positions itself as a premium alternative to UPI, targeting iPhone users who value convenience and security features like Face ID authentication. While UPI dominates volume, Apple focuses on higher-value transactions where its 0.2% fee becomes viable. The service also integrates with Apple's ecosystem benefits like purchase tracking and fraud protection, differentiating from UPI's utilitarian bank transfer model.
8Strategic foothold
Apple Pay's India launch represents a long-term play in the world's most populous country. Despite UPI's dominance, Apple can leverage its growing iPhone user base and premium positioning. Success depends on expanding bank partnerships beyond Axis and increasing merchant acceptance. The move aligns with Apple's broader India strategy including local manufacturing and retail expansion, making payments a logical next frontier.
Original article: TechCrunch — Apple Pay Launches in India with Axis Bank Partnership