Apple Pay Finally Launches in India as Major Banks Hold Back
TL;DR
- Apple Pay has officially gone live in India with support for UPI, Visa, Mastercard and RuPay credit and debit cards, starting with a small group of launch partners including Axis Bank, ICICI Bank and Kotak Mahindra Bank.
- India's biggest lenders — HDFC Bank, State Bank of India and Punjab National Bank — are notably absent at launch over fee structures, tokenization terms and UPI integration concerns.
- Analysts say Apple won't dethrone PhonePe, Google Pay and Paytm overnight, but its NFC-powered, premium-focused entry could reshape in-store tap-to-pay and credit card adoption.
A Launch Years in the Making
After nearly a decade of rumors, regulatory hurdles and false starts, Apple Pay is finally live in India.
Apple confirmed the rollout this week, allowing iPhone users in India to add eligible credit and debit cards to the Wallet app and pay via tap-to-pay NFC at retail terminals, within apps, and on the web with Safari. Crucially for India, the launch also includes UPI functionality developed in partnership with the National Payments Corporation of India (NPCI), letting users link bank accounts for UPI payments via biometric Face ID authentication.
The timing is significant. India is now the world's second-largest iPhone market by shipments growth and Apple's second-largest manufacturing hub. With more than 15 million iPhones sold annually in the country and a rapidly expanding Apple Store retail footprint in Mumbai and Delhi, Apple finally has the installed base to justify a full payments push.
Until now, Apple Wallet in India was limited to transit cards, boarding passes and event tickets — no payments. That changes starting today for users on iOS 26 with supported cards.
Who's On Board at Launch
Apple's initial banking lineup is deliberately narrow but strategic.
Confirmed launch partners include Axis Bank, ICICI Bank, Kotak Mahindra Bank, SBI Cards and American Express India, covering Visa, Mastercard and RuPay credit cards, plus select debit cards. Axis Bank is serving as the flagship acquiring and UPI sponsor partner, enabling the backend tokenization and UPI linking.
Apple says users from these banks can add cards in seconds by scanning in the Wallet app, with provisioning secured by Apple's tokenization system that replaces real card numbers with device-specific tokens. For UPI, the experience mirrors BHIM and other UPI apps, but with Apple handling the authentication layer.
More banks and card networks are expected in the coming months, with Apple promising support for additional issuers by early 2027.
Why India's Biggest Banks Are Holding Back
The most striking part of the launch is who isn't there.
HDFC Bank, India's largest private lender and largest credit card issuer, State Bank of India, the country's largest public bank, and Punjab National Bank are all missing from the day-one list. Together they account for nearly half of all credit cards in circulation.
According to banking sources, three issues are driving the hesitation:
First, economics. UPI transactions carry zero merchant discount rate (MDR) by regulation, leaving little room for Apple's traditional cut of card transactions. Large banks are reportedly pushing back on sharing card interchange with Apple.
Second, control and data. India's data localization rules and NPCI's tokenization framework require payments data to be stored and processed locally. While Apple says it is fully compliant, larger banks want additional assurances on customer ownership, dispute handling and access to transaction analytics.
Third, competitive risk. With PhonePe, Google Pay and Paytm controlling more than 85% of UPI volume, major banks are wary of handing Apple a premium gateway to their most affluent customers without better commercial terms.
Neither HDFC Bank nor SBI has ruled out joining, both telling local press they are in active discussions and evaluating customer demand.
Taking on the UPI Giants
Make no mistake: Apple is entering one of the toughest payments markets on earth.
India processed over 185 billion UPI transactions in the last fiscal year, almost entirely free for consumers and merchants. PhonePe and Google Pay dominate, with Paytm, CRED and Navi rounding out the field. Unlike the US or UK, where NFC tap-to-pay was still growing when Apple Pay launched, India already has a fast, ubiquitous QR-based system that works on even $100 Android phones.
Apple isn't trying to replace UPI, executives suggest — it's trying to sit on top of it. The strategy is twofold: capture high-value, in-store NFC payments at malls, cafes, metro stations and Apple resellers where iPhone users shop, and drive RuPay and Visa credit card usage through Apple Pay where Apple can still earn.
Early merchant support includes Reliance Retail, Tata Croma, Starbucks India, Domino's, Blinkit and MakeMyTrip for online checkout, plus any Visa and Mastercard contactless terminal nationwide.
What It Means for the Future of Digital Payments
Analysts say the real impact may not be volume, but value.
India's credit card penetration remains under 8%, but it's growing fastest among young, urban, premium users — exactly Apple's demographic. By making credit cards easier and more secure to use on iPhone, Apple could accelerate the shift from UPI-linked bank accounts to credit-on-UPI, a segment NPCI has been aggressively pushing.
The launch also puts pressure on Google. Google Pay has dominated Android in India for years with full UPI integration. Now, for the first time, iPhone users have a native, system-level alternative that could peel off affluent users.
Longer term, the move sets the stage for Apple Card, Apple Pay Later and Tap to Pay on iPhone for small merchants — none of which are launching today, but all of which become possible now that the core infrastructure is live.
For now, Apple Pay in India is a soft launch, not a takeover. But after years of delays, Apple is finally in the game — and even without HDFC and SBI, that's a signal the country's digital payments race is entering a new, premium phase.
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