Apple in talks with ICICI Bank, HDFC Bank and Axis Bank to start payment service in India

Apple Inc. is finally making its long-awaited move into India’s $3 trillion digital payments ecosystem. Reports indicate that the Cupertino giant is in active negotiations with HDFC Bank, ICICI Bank, and Axis Bank, along with global networks like Mastercard and Visa, to launch Apple Pay by mid-2026.

Add businessleague.in as a Preferred Source

While Apple has previously hesitated due to India’s strict data localization laws and the dominance of the non-profit NPCI, the recent 10% surge in iPhone market share has made the region an “unignorable” frontier for Apple’s services revenue.

Also Read |Tamil Nadu Voter List Purge: 97 Lakh Names Deleted in SIR Phase 1

The UPI Hybrid: Apple’s Strategy for India

In most global markets, Apple Pay is a “Card-in-Wallet” service. However, in India, where UPI accounts for nearly 80% of digital transactions, Apple is reportedly building a hybrid model.

• Native Experience: Users will likely be able to link their bank accounts directly to the Wallet app for UPI Scan-and-Pay.

• Tap-to-Pay: The NFC (Near Field Communication) chip on iPhones will finally be unlocked for “Tap-to-Pay” at Indian merchant terminals, allowing users to pay by simply holding their phone near a PoS machine.

Biometrics Over OTP: The Security Shift

A major catalyst for this launch is the Reserve Bank of India’s (RBI) late-2025 policy shift.

• The Change: Indian regulations now permit biometric authentication (Face ID/Fingerprint) as a valid Factor of Authentication for digital payments.

• The Benefit: Currently, most Indian apps require a manual PIN or an SMS OTP. Apple Pay will offer a “zero-friction” experience where a double-click of the side button and a Face ID scan completes the payment instantly.

Also Read |Tamil Nadu Voter List Purge: 97 Lakh Names Deleted in SIR Phase 1

Market Context: Competing with Google Pay and PhonePe

Apple enters a crowded field dominated by PhonePe (Walmart) and Google Pay (Alphabet).

• The Target: Apple is not chasing the mass market but the “Premium 10%” of Indian smartphone users who spend significantly more on average.

• Service Revenue: By taking a small cut of transactions (a standard Apple Pay practice), the company aims to diversify its income away from just hardware sales.

Reality Check

Apple Pay is famous for its ease of use. Still, the “Apple Tax” (the transaction fee Apple charges banks) has been a sticking point in India’s “Zero-MDR” (Merchant Discount Rate) environment. Therefore, while the technology is ready, the commercial agreement with Indian banks will be the real hurdle. In fact, if banks refuse to share their wafer-thin margins, Apple might have to pivot to a “subscription-based” or “ad-free” value proposition to stay viable.

The Loopholes

The launch is rumored for “mid-2026.” In fact, this is a “Regulatory Loophole”—Apple is likely waiting for the full rollout of the Digital India Act to ensure its data-handling practices are fully compliant. Therefore, the “timeline is fluid” because one minor change in RBI’s storage norms could push the launch to 2027. Still, the “NFC Loophole”—where Apple currently restricts the iPhone’s NFC chip for third-party apps—gives Apple Pay an unfair “native” speed advantage over Google Pay on iOS.

Also Read |Tamil Nadu Voter List Purge: 97 Lakh Names Deleted in SIR Phase 1

What This Means for You

If you are an iPhone user in India, prepare for a much sleeker checkout experience. First, realize that you will no longer need to open a third-party app, wait for the camera to initialize, and scan a QR code; you could potentially just “tap” your phone. Then, if you use Apple Watch, understand that “Wrist-Pay” will finally become a reality in India, allowing you to pay at Starbucks or supermarkets without even taking out your phone.

Finally, understand that privacy is the primary selling point. Apple Pay doesn’t share your actual card number or bank details with the merchant, using “tokenization” instead. You should check if your current bank (especially HDFC/ICICI/Axis) offers any Apple-exclusive cashback once the pilot begins. Before the launch, ensure your Apple ID region is set correctly to India to receive the update as soon as it goes live.

What’s Next

Apple is expected to announce a private beta for select bank customers by late 2025. Then, look for an official mention of “India expansion” during the WWDC 2026 keynote in June. Finally, expect a major marketing push alongside the iPhone 18 launch, positioning the phone as the “only wallet you need” in the world’s fastest-growing economy.

Also Read |Tamil Nadu Voter List Purge: 97 Lakh Names Deleted in SIR Phase 1

End…

Add businessleague.in as a Preferred Source