At launch, Apple Pay in India works only with Axis Bank credit cards, leaving out UPI, RuPay and every debit card.
MUMBAI: Apple launched Apple Pay in India on 30 September 2026, with Axis Bank as its first and, for now, only banking partner. At debut, the service supports only Axis Bank credit cards on the Visa and Mastercard networks. Notably, UPI, RuPay cards, debit cards and cards from other lenders such as HDFC Bank, ICICI Bank and SBI Card are all excluded.
What launched and who can use it
The service runs through the Apple Wallet app on iPhone XR or later with iOS 18, and on Apple Watch Series 6 or later. Users can tap to pay at contactless terminals, check out inside supported apps or pay on Safari, with Mac web checkout to follow. Payment firms including Razorpay, PayU, Pine Labs, Paytm, Juspay, Cashfree, Mswipe and Worldline have enabled acceptance. Meanwhile, launch merchants span Zomato, Blinkit, Croma, Tata 1mg, Ixigo and Reliance brands.
Jennifer Bailey, Vice President of Apple Pay and Apple Wallet, said users can pay in stores without an extra app, PIN or OTP, and check out online without re-entering card details. Axis Bank Managing Director and CEO Amitabh Chaudhry described the moment as “a significant inflection point in payments.”
The rule change that opened the door
For years, a regulatory hurdle stood in the way. RBI rules required an additional factor of authentication for domestic card payments, typically an SMS OTP online or a PIN at the counter. Apple Pay’s design, by contrast, relies on Face ID or Touch ID.
The RBI’s Authentication Mechanisms Directions, issued on 25 September 2025 with compliance due by 1 April 2026, resolved that conflict. They recognise biometrics, combined with a device-bound credential, as a valid second factor. Importantly, the directions also place liability on issuing banks for losses from non-compliant transactions, which gave Axis the clarity to proceed.
Security rests on tokenisation. Card numbers are never stored on the device or shared with merchants. Instead, Visa or Mastercard issues a unique device account number held in a dedicated secure chip, and each payment generates a single-use cryptogram.
Why not UPI
The missing piece is as much commercial as technical. Globally, Apple earns a share of card fees, with estimates in mature markets putting it at around 0.15% on credit transactions. However, standard UPI payments carry a zero merchant discount rate by regulation, leaving no fee pool to share. Credit lines on UPI and a proposed 0.4% MDR on larger merchant payments could create some income, but at thinner margins than international card interchange.
Structure matters too. UPI requires an NPCI-approved app sponsored by a bank, whereas Apple Pay digitises cards inside hardware. Similarly, RuPay support needs separate tokenisation arrangements between Apple, NPCI and banks, which were not finalised before launch.
Two markets in one
The numbers explain the positioning. In August 2026, UPI processed 24.51 billion transactions worth ₹29.82 trillion and accounts for about 84% of India’s digital payment volume. Credit cards logged 632.45 million transactions worth ₹2.02 trillion that month across 124.1 million active cards. Consequently, cards carry far higher average ticket sizes.
Axis Bank, the fourth-largest issuer by card count, had 16.29 million active credit cards in August and an estimated 12.1% share of card spending. As a result, Apple Pay’s initial audience is narrow: iPhone owners who also hold an Axis credit card.
A cautious issuer landscape
Other lenders have moved more slowly. Apple held talks with HDFC Bank, the market leader with over 20 million cards, and with ICICI Bank. Yet neither had finalised terms as of September, with reports pointing to Apple’s fee share as a sticking point. Card economics are already tight. Through 2025 and 2026, issuers including Axis, HDFC Bank and SBI cut rewards, while the RBI raised risk weights on card receivables to 125% for banks.
For Axis, the bet is visibility among affluent iPhone users and top-of-wallet status for high-value spending. The bank hopes that will offset the revenue it shares with Apple.
What to watch
Several questions remain open. Firstly, it is unclear when HDFC Bank, ICICI Bank or SBI Card might join. Secondly, RuPay support depends on a tokenisation deal with NPCI. Thirdly, any UPI feature would likely hinge on changes to fee structures. Additionally, in-store use depends on NFC terminals, which are less common than QR codes in tier-2 and tier-3 markets. Monthly RBI card data will show whether Axis gains a measurable lift, while the Apple–Axis fee terms remain undisclosed.
A premium layer, for now
Apple Pay does not challenge UPI’s hold on everyday payments. Instead, it adds a biometric card layer for customers who prefer credit, rewards and chargeback protection. How fast that layer widens will depend less on technology than on whether other banks find the economics worth it.
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