Apple Pay India Launch Delayed: UPI Integration Pending
By ThePip Desk
Apple Pay’s India launch is set for October, but will initially exclude UPI payments due to regulatory delays. Only Visa & Mastercard credit cards will be supported.
Apple Pay is anticipated to debut in India between late September and October, targeting the nation’s premium digital payments market. The service will initially support only credit cards from global networks such as Visa and Mastercard.
Crucially, Unified Payments Interface (UPI) payments will not be available at launch. This omission is due to pending approvals from the National Payments Corporation of India (NPCI) and various sponsor banks.
Initial Functionality and Operational Details
To utilize Apple Pay, users must add their credit card details to Apple Wallet. Compatible Apple devices will then facilitate contactless payments via NFC at point-of-sale terminals, mirroring its operation in other international markets.
A notable limitation for Indian users will be the inability to link directly to bank accounts, a core feature of UPI. The service’s initial rollout focuses strictly on credit card transactions.
The UPI Integration Hurdle
The delay in UPI integration stems from a fundamental disagreement over authentication methods. Apple advocates for its device-level biometric authentication, specifically Face ID or Touch ID, for transaction verification.
Conversely, the NPCI mandates UIDAI-backed authentication for UPI transactions. This requirement presents a significant technical and regulatory hurdle for Apple’s preferred system.
Additionally, Apple’s tightly integrated NFC system on iPhones poses a challenge within India’s broader interoperable digital payments ecosystem. This architectural difference contributes to the current delay in UPI support.
Transaction Fee Negotiations Underway
Apple India is currently engaged in discussions with credit card issuers regarding transaction fees. The technology giant is seeking a fee of 15-20 basis points per transaction.
Major banks involved in these negotiations are proposing a lower rate of 10 basis points. These transaction fees would be absorbed by the banks from their existing card transaction revenue, ensuring no direct cost to customers or merchants.
The introduction of Apple Pay, even with its initial limitations, is expected to provide a significant boost to India’s burgeoning credit card market. Its impact on the broader digital payments landscape, particularly concerning UPI, remains a developing story.