Apple Puts Plans of Launching UPI-Based Apple Pay in India on Hold

Apple has put its plans of bringing Apple Pay in India on hold. The company has taken this decision after the rollout of similar payment services from Amazon and WhatsApp hit regulatory hurdles.

Apple held discussions with leading banks and the National Payments Corporation of India, which runs the UPI platform, to launch Apple Pay in the country. However, due to the new data localization rules from the Reserve Bank of India which requires companies to store all payment data in India, Apple has decided to wait and watch. Other multinational companies like WhatsApp, MasterCard, and Visa are now also unsure of their plans in India due to this new law.

Additionally, Apple also hit design hurdles. It wanted to use fingerprint as a way of authentication for UPI payments. However, this was not approved by NPCI as it requires customers to enter a 4 or 6-digit passcode for verification purposes. It does not consider device biometric verification as a mode of authentication.

“NPCI has prescribed that transactions can be authenticated by biometrics only when they get validated by UIDAI,” said the banker. “NPCI does not allow biometrics collected by devices as a mode of authentication.”

Similar to Google Tez/Google Pay, Apple seemingly wants to base Apple Pay around UPI in the country. This would allow users to pay for their purchases in-store by simply scanning a QR code. In other countries, Apple Pay works differently as it talks to the PoS terminal over NFC via an iPhone.

Apple was earlier planning on launching Apple Pay in India within a couple of months, but a third source said that there was no specific timeline for its launch.

Our Take

Given how India’s market is, NFC-based payment terminals are unlikely to make many inroads in the country. Thus, major tech companies are looking to base their payment products around UPI which is backed by the government. However, the strict rules and unclear regulations mean that most companies are currently playing a wait and watch game instead of going ahead with their products.

As for Apple, it is already battling many regulatory issues in India and it is clearly not interested in adding another one to the list.