PhonePE and Google Pay hold dominant shares of India’s digital wallet market, where most transactions run on the Unified Payments Interface (UPI) real-time payments rail. While Apple Pay would enter an already crowded ecosystem, early signals suggest the tech giant’s wallet could have a larger impact than initially expected.
When Apple announced plans roughly a month ago to bring Apple Pay to India, the launch seemed mainly targeted toward iPhone users who are also Visa and Mastercard cardholders. This segment would be able to use Apply Pay for contactless retail payments.
Since then, Apple has reportedly entered discussions with three of India’s largest banks: ICICI Bank, HDFC Bank, and Axis Bank. This would expand Apple Pay’s reach to customers of those institutions in addition to existing card network users.
A key question, however, is UPI integration. Earlier indications suggested Apple Pay would launch without UPI support—a limitation that would constrain adoption in a market where UPI underpins the vast majority of digital transactions. Most recent reports, including one from Bloomberg, indicate that UPI integration is expected by the time Apple Pay launches in India, potentially mid-year. If realized, this would materially expand the wallet’s footprint.
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Apple Pay is the leading mobile wallet in the U.S., its home market, with over 90% of the market and roughly 65.6 billion users. This market dominance has been accomplished by the near ubiquity of the iPhone and Apple’s strong competitive moat.
That strong domestic position has prompted Apple to look abroad for incremental growth opportunities, including cross-border payments functionality in select markets.
India, the world’s most populous country, represents a powerful opportunity. iPhones now account for roughly 10% of India’s smartphone market, and Apple recently opened its sixth retail store in the country—a signal of its long-term commitment to the region.
Adding Biometric Authentication
Previous attempts to deepen Apple’s footprint in India were slowed by regulatory hurdles, like stricter requirements around biometric authentication. Apple’s early and consistent integration of facial and fingerprint recognition has helped normalize biometric verification globally. As biometrics have become more mainstream, their role in payments has expanded as well.
Historically, India required PINs or two-factor authentication to authorize digital transactions. Recent regulatory updates now allow for biometric authentication for UPI transactions within transaction limits—a shift that could lower friction for wallets capable of supporting it.
Still, competition is intense. Even Amazon Pay has struggled to gain traction in India’s digital wallet market. While Apple’s technology, ecosystem, and partnerships are clear advantages, the company faces formidable incumbents and structural challenges as it seeks to establish Apple Pay in India.
