Apple Pay to launch in India by October
What's the story
Apple is gearing up to launch its digital payments service, Apple Pay, in India by October, as per a Business Standard report. The move will give the tech giant a foothold in the country's premium credit card segment and earn it a fee on each transaction. Initially, Apple Pay will support credit cards on global networks like Visa and Mastercard, using the same framework as other markets.
Service expansion
Initial launch won't support UPI transactions
The initial launch of Apple Pay in India won't support transactions through Unified Payments Interface (UPI).
For UPI support, Apple would need clearance from the National PaymentsCorporation of India (NPCI) and a partnership with a sponsor bank for routing such transactions.
The tech giant has been negotiating with major credit card issuers over transaction fees, which wouldn't be charged to customers or merchants but paid by banks from their own earnings on card payments, called interchange.
Fee discussions
Credit card issuers pushing for lower rate of 10 bps
Apple has been negotiating a 15-20 basis points (bps) share of interchange fee on each credit card transaction with banks.
However, some major credit card issuers have been pushing for a lower rate of 10 bps.
An interchange is a fee paid by the merchant's bank to the card-issuing bank for processing a card payment and is part of the merchant discount rate (MDR), the fee paid by merchants for accepting digital payments.