HSBC India, the local arm of the UK-headquartered banking giant, is in advanced discussions to become Apple Pay’s second partner bank in India, according to sources familiar with the matter. The potential onboarding follows Apple Pay’s long-awaited debut in the Indian market during September, which launched under an exclusive partnership with Axis Bank. Industry insiders reveal that HSBC India could complete its integration with the platform by the end of the current financial year (FY27). Concurrently, several other major Indian lenders are holding commercial negotiations with the iPhone maker to assess the feasibility of integrating with its contactless payment ecosystem, which currently works with more than 11,000 banking institutions globally. The primary focal point of these discussions remains the commercial arrangement required by Apple—specifically the fee structure imposed on card transactions, which directly absorbs a portion of the interchange income typically earned by issuing banks. While this reduction in margin has prompted a degree of caution among domestic financial institutions, many lenders remain highly motivated to secure a deal. The compelling drive behind joining Apple Pay lies in offering a premium, seamless digital payment experience to a high-value customer base of iPhone users across the country. As financial institutions balance economic feasibility against competitive edge, HSBC India’s prospective entry signals a broader shift toward expanding tokenized and contactless digital payment ecosystems in India’s evolving financial market.
Interchange Fee Economics Under Scrutiny as Indian Banks Evaluate Apple Pay Tie-Ups
