Exploring India as a New Market

Apple Pay is poised to enter India’s competitive digital wallet market, home to PhonePE and Google Pay, which largely operate on the Unified Payments Interface (UPI) rail. The tech giant’s wallet could have a greater impact than anticipated due to evolving market dynamics.

When Apple announced its plans to bring Apple Pay to India about a month ago, the focus was mainly on iPhone users who are also Visa and Mastercard cardholders. This segment would enable contactless retail payments via Apple Pay.

Since then, reports suggest that Apple has been in discussions with ICICI Bank, HDFC Bank, and Axis Bank, expanding its reach beyond existing card network users to include customers of these institutions.

A crucial aspect is UPI integration. Initial indications pointed towards a launch without UPI support, which could have limited adoption. Recent reports indicate that UPI integration may be ready for the Apple Pay India launch, potentially mid-year. This would significantly enhance Apple Pay’s market presence in the country.

Opportunities in India

India offers a compelling opportunity for Apple as it seeks new markets beyond its dominant position in the U.S. iPhones now account for about 10% of India’s smartphone market, and the company has recently opened its sixth retail store there, signaling long-term commitments.

Historically, regulatory challenges around biometric authentication have slowed Apple’s expansion in India. However, recent changes to regulations allow for biometric verification within certain transaction limits, lowering friction for wallets like Apple Pay that can support it.

Despite these advantages, competition is fierce. Amazon Pay, among others, has struggled to gain traction. Apple’s technology, ecosystem, and partnerships give it significant competitive edge, but the company still faces formidable incumbents and structural challenges in establishing its presence in India.