Apple Pay finally arrives in India, Axis Bank gets 1st-mover advantage

The service is available on iPhone and iPad at launch, with support for Mac in the works; UPI and RuPay are not supported initially

Global tech major Apple has finally kicked off its payments service, Apple Pay, in India on Wednesday. The service will be available to Axis Bank cardholders on the Visa and Mastercard networks.  

This gives India’s fourth-largest credit card issuer a first-mover advantage and a window of exclusivity, edging out larger peers in the process.    

The bank is likely to pay Apple 10-15 basis points (bps) from the interchange fee it earns on card transactions, according to industry sources, lower than what the iPhone maker had initially sought. 

This builds on Axis Bank’s existing tieup with the iPhone maker, under which the lender offers affordability options for Apple gadgets. 

 

 

Axis Bank customers have an option for no-cost equated monthly instalments and cashback on purchases of Apple products, including iPhones, MacBooks, Apple Watches, AirPods, and iPads. ICICI Bank and American Express are the other card issuers offering such discounts on Apple products in India. Apple previously had an exclusive tieup with HDFC Bank for such offers for five years, which ended around 2024. 

“Apple had sought around 20 bps from issuers in India, but the final rate for Axis Bank is likely to be around 10 bps. The fee is paid from the interchange earned by the bank on credit card transactions and is subject to negotiations with individual lenders,” a person with knowledge of the matter said.

 

“In most global markets, Apple has negotiated a fee of around 15 bps, even when its initial ask was higher. The same appears to be the case in India. A portion of the fee goes directly to Apple, and several large card issuers are still evaluating the economics, which is why only one bank has joined the platform at launch,” a second person said. 

 

The merchant discount rate (MDR) on credit card transactions typically ranges from 1.5 per cent to 2 per cent, although it can go up to 3 per cent for certain categories. For debit cards, MDR can be as high as 0.9 per cent. Globally, Apple charges card issuers around 15 bps on transactions made through Apple Pay, although the fee varies across markets.

 

Axis Bank had 16.3 million credit cards as of August, out of 124 million nationwide. HDFC Bank was the largest issuer, with a little over 27 million cards, followed by State Bank of India at nearly 23 million and ICICI Bank at around 20 million.

 

“The top banks were very keen because Apple Pay is an important offering. The decision was based on a very well-thought-out process. Apple is a very strong brand, possibly one of the strongest in the world in terms of brand equity. Apple would want to partner a bank that can support it from a technology, app, and overall customer experience perspective without affecting its brand. All of those factors have been considered. Commercial terms are one factor, but it is not only about the commercials,” a source aware of the development said.

 

“Apple gives a partner a reasonably good window to get the first-mover advantage, but eventually it would want as many of its partners as possible to be able to offer the service,” the source said.

 

India joins more than 90 countries and regions where Apple Pay is already available, with over 11,000 bank and network partners worldwide, Apple said in a statement. Users can make payments using Apple Pay on iPhone and iPad, while support for Mac computers is in the works. Apple Pay allows users to tap and pay at stores without entering a personal identification number or one-time password, while offering a similar experience at online checkouts.

 

At launch, Apple Pay will be accepted by merchants across India, including Apple Store locations, Blinkit, Chaayos, Comet, Croma, Interflora, ixigo, Le15, Reliance Brands, Tata 1mg, and Zomato, among others. Apple has worked with Indian payments firms to enable the service across their merchant networks. These include Cashfree, Juspay, Mswipe, Paytm, PayU, Pine Labs, Razorpay, and Worldline.

 

Amitabh Chaudhry, managing director and chief executive officer, Axis Bank, said the launch comes at a time when technology, security, and changing customer expectations are reshaping payments. “At Axis Bank, we aspire to remain at the forefront of this transformation by building payment experiences that are progressive, trusted, and deeply relevant to our customers. The introduction of Apple Pay advances this ambition, bringing greater choice and flexibility to our credit card customers, with support across the Mastercard and Visa networks,” Chaudhry said.

 

Strategically, Axis Bank expects the partnership to deepen customer engagement, drive greater card usage in everyday transactions, and strengthen customer retention, a spokesperson for Axis Bank said. “Over time, it also has the potential to support customer acquisition, particularly among digitally engaged and premium customer segments who value secure and intuitive payment experiences,” the spokesperson said.

 

Axis Bank has a strong presence across affluent, premium, and wealth segments, where customers increasingly value convenience, security, and simplicity. “For our premium and wealth customers, Apple Pay further enhances the Axis Bank card proposition by offering an intuitive, secure, and private way to pay, aligned with their increasingly digital lifestyles and expectations,” the spokesperson added.