Apple Pay Fails to Impress as UPI Dominates Indian Market

Apple's entry into India's digital payments market has not yielded encouraging results. The company launched Apple Pay in collaboration with Axis Bank, but shares fell by approximately 1.5% on October 1, trading at $328.25. This decline comes despite the rollout of Apple Pay, which is expected to provide iPhone owners with an alternative to the popular Unified Payments Interface (UPI). However, UPI already handles around 84% of India's digital payments, making it a dominant force in the market.

The first phase of Apple Pay's launch includes eligible Axis Bank Visa and Mastercard credit cards. However, RuPay cards are excluded from this initial offering. The lack of transparency surrounding transaction revenue and participating-card volume has left investors without concrete numbers to assess the opportunity. As a result, shares are trading at a premium of 14.2% above the estimated value.

While India's entry into Apple's ecosystem is seen as a potential growth driver, the next challenge for the company lies in increasing usage and adoption. This will require wider bank coverage and everyday convenience to make Apple Pay a viable alternative to UPI.