Apple Pay set for India entry, but can it crack UPI’s grip?

Apple is reportedly preparing to launch its digital payments service, Apple Pay, in India by the end of 2026, marking a potential new phase in the country’s highly competitive digital payments market.

The service, currently available across 89 markets globally, allows users to make tap-to-pay transactions using iPhones and Apple watches at compatible point-of-sale terminals. According to media reports, Apple is in the process of seeking regulatory approvals and is working closely with Indian banks, regulators and card networks to ensure compliance with local payment rules before the launch.

The focus will first be on contactless, card-based payment methods; integration with India's Unified Payments Interface (UPI) will probably come next, albeit with regulatory obstacles.

Fee arrangements with card issuers are still under discussion, and Apple is understood to be considering a phased approach, which may initially exclude seeking approval from third-party UPI application providers.

A late entry into a mature market

Unlike many global markets where Apple Pay helped accelerate contactless payments, India already has a deeply entrenched and widely adopted digital payments ecosystem. The Unified Payments Interface (UPI), backed by the National Payments Corporation of India (NPCI), dominates everyday transactions, with platforms such as Google Pay, PhonePe and Paytm enjoying massive user bases and merchant acceptance.

UPI’s success lies in its interoperability, zero or low transaction costs for users, and deep integration with Indian bank accounts, making it accessible across income segments and device types. Apple Pay, by contrast, would enter a market where digital payments are not only commonplace but already optimised for local needs.

How Apple Pay may position itself

Industry observers expect Apple Pay’s India rollout to initially focus on card-based tap payments rather than UPI-native transfers, at least in its early phase. This could position the service more strongly for higher-value transactions, organised retail, transit systems and premium merchant locations where contactless card payments are already accepted.

Apple’s strength lies in its tightly controlled ecosystem, security architecture and user experience. The service is likely to appeal to India’s growing base of premium smartphone users, particularly in urban centres, who already use Apple devices and international payment services.

However, this also highlights a key limitation. Apple Pay will be restricted to Apple hardware, placing it at a disadvantage in a market where Android devices account for the overwhelming majority of smartphones. Google Pay and other UPI platforms benefit from platform neutrality and far wider reach.

Regulatory and ecosystem challenges

Regulatory alignment will be critical to Apple Pay’s success. India’s payments landscape is shaped by domestic data localisation norms, evolving rules around tokenisation, and strong policy support for UPI as a public digital infrastructure. Apple’s reported engagement with regulators and banking partners suggests it is taking a cautious, compliance-first approach.

Whether Apple Pay integrates directly with UPI in the future remains an open question. Without UPI interoperability, Apple Pay is unlikely to replace existing payment apps for everyday peer-to-peer transfers, bill payments and small merchant transactions, which form the backbone of India’s digital payments volume.

Can Apple Pay compete with UPI leaders?

Apple Pay is unlikely to directly displace Google Pay, PhonePe or Paytm in India’s mass-market payments space. Those platforms are deeply embedded in daily consumer behaviour, supported by extensive merchant networks and localised features.

Instead, Apple Pay may carve out a niche as a complementary payment option, focused on convenience, security and premium user segments. Its impact may be felt more in specific use cases, such as contactless retail, transit payments and international transactions, rather than as a broad UPI alternative.

For the Indian market, Apple Pay’s entry signals continued global interest in India’s digital payments ecosystem, even as domestic platforms retain a strong advantage. The launch, expected by the end of 2026, will test whether global wallet players can adapt to an environment shaped not by card networks, but by a home-grown, real-time payments infrastructure that has become the default for millions of users.

In that sense, Apple Pay’s success in India will depend less on brand power, and more on how effectively it aligns with the country’s unique payments architecture.