NFC

Hyderabad: Apple is preparing to launch its digital payments service, Apple Pay, in India by October, but the platform is unlikely to support Unified Payments Interface (UPI) transactions at launch. The service will begin by supporting credit cards issued on global networks such as Visa and Mastercard, using the same framework Apple runs in other markets, Business Standard (BS) reported, citing three people aware of the development. Users will be able to add eligible cards to the Apple Wallet app and make contactless payments by tapping their device at point-of-sale terminals using near field communication (NFC). Apple has been readying the launch for the end of September or October, the BS quoted a source as saying. No UPI support at launch Apple Pay is not expected to support UPI-based payments initially. To offer UPI, Apple would need clearance from the National Payments Corporation of India (NPCI) and would have to partner with a sponsor bank to route such transactions. Consequently, the service's footprint in India is likely to remain limited to NFC-enabled point-of-sale terminals and card-based online payment flows, leaving the country's QR code-driven UPI ecosystem largely unaffected. Apple has been in negotiations with the country's largest credit card issuers for months over how much of each transaction it would retain. The technology company has sought a share of 15-20 basis points (bps) of the interchange fee on each credit card transaction, while some major issuers have pushed for a lower 10 bps. One basis point equals 0.01 per cent. Interchange is the fee paid by a merchant's bank to the card-issuing bank for processing a card payment, and forms part of the merchant discount rate paid by merchants for accepting digital payments. The fee sought by Apple would not be charged to customers or merchants but would be borne by banks out of their own earnings from card transactions. Credit card usage may rise Payments companies expect the launch to spur credit card transactions in the country. Industry watchers also say the service could speed up checkout at stores, apps and websites by removing the need to key in card numbers, CVV and one-time passwords for every transaction, potentially raising spending frequency among high-value customers. Tokenisation, along with Face ID and Touch ID authentication, is also expected to lower the risk of card skimming and phishing compared with manual card entry. Apple Pay is already available in more than 90 markets worldwide. Its India entry comes as the company has recorded double-digit growth in the Indian market.

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