Apple Targets October India Launch With Axis Bank As UPI Problems Loom

Apple Pay may have found its India opening just as digital payment economics are shifting.

Apple is reportedly preparing to launch Apple Pay in India in October with Axis Bank credit cards, while India is also introducing a limited Merchant Discount Rate (MDR) on larger UPI merchant payments.
 

TL;DR

 

• Apple Pay is reportedly set to launch in India in October, starting with Axis Bank credit cards.
• HDFC Bank and ICICI Bank remain in discussions with Apple, while UPI support may arrive later.
• India will introduce a 0.4% MDR on qualifying UPI merchant payments above ₹2,000 from October 15.

 

Apple Pay India Launch Starts With Axis Bank Credit Cards

Apple plans to begin its India rollout with Axis Bank, according to three sources familiar with the matter.

Axis Bank is India’s fourth-largest credit card issuer, with 16.26 million active cards as of July, while Apple is expected to add more banks through direct agreements over time.

HDFC Bank and ICICI Bank have also held discussions with Apple, although commercial terms had not been finalized. Apple and the three banks have not publicly confirmed the reported launch arrangements.

Apple Pay lets users make tap-and-pay purchases using tokenized card details stored on Apple devices, with payments authenticated through features such as Face ID or Touch ID. India’s earlier move to permit biometric authentication for card payments helped remove an important technical hurdle.

The launch also follows Apple’s growing hardware presence in India. Its share of the country’s smartphone market has doubled since 2022 to around 8%.
 

 

Apple Pay Enters India As UPI MDR Rules Change

The bigger backdrop is UPI, which accounts for about 84% of India’s digital payment transactions by volume and processed 24.5 billion transactions worth ₹29.823 trillion in August.

After years of zero MDR, India is introducing a 0.4% Merchant Discount Rate on qualifying person-to-merchant UPI transactions above ₹2,000 from October 15. The government says person-to-person transfers and payments up to ₹2,000 will remain free, while roughly 96% of merchant transactions will be unaffected.

The change has still sparked debate. Authorities say MDR will help make UPI financially sustainable and support payments infrastructure, while critics have raised concerns that merchants could indirectly pass costs to consumers or prefer cash.

That timing is notable for Apple. Earlier reporting said Apple had been reluctant to launch Apple Pay with UPI because the zero-MDR framework offered little room for transaction-based economics. Separate reports suggest Apple Pay could initially launch with tokenized Visa and Mastercard cards, with UPI integration following later.
 

 

Apple Pay India Rollout Still Faces UPI And Bank Pricing Questions

Commercial negotiations have also slowed Apple Pay’s arrival. Earlier reports said Apple sought around 20 basis points per transaction from issuing banks, while larger banks were willing to offer around 15 basis points.

For now, the reported Axis Bank launch gives Apple a route into India without solving the entire UPI equation on day one. However, with UPI dominating everyday digital payments, broader bank support and eventual UPI integration could determine how far Apple Pay expands beyond premium iPhone and card users.