Apple has restored the ability for Indian users to link debit and credit cards for subscription payments, reversing a 2022 decision that removed these options due to regulatory friction. The feature is being rolled out gradually across the country, marking a strategic shift as Apple prepares to enter India's booming digital payments market.
Background: RBI's OTP Mandate
The Reserve Bank of India (RBI) introduced mandatory OTP verification for recurring payments above Rs 5,000 to enhance transaction security and prevent unauthorised deductions. This regulation, part of the recurring payment guidelines, required explicit customer authentication for each transaction, which Apple cited as causing friction for users.
Apple's Initial Response in 2022
In 2022, Apple removed debit and credit card options for recurring payments in India, shifting to an Apple ID-linked balance system. The company argued that the OTP requirement disrupted the seamless user experience, leading to a temporary ban on card-based subscriptions.
Feature Restoration and Gradual Rollout
Apple has now reinstated the ability to link debit and credit cards for subscription payments, rolling out the feature gradually across India. This move is seen as a precursor to Apple's broader ambitions in the Indian digital payments landscape.
Strategic Move for Apple Pay
The restoration aligns with Apple's plans to launch UPI-compliant Apple Pay in India by the end of December. According to reports, Apple aims to capture a share of the rapidly growing digital payments market, which processes over 757 million UPI transactions daily with a total value of Rs 28 lakh crore (US$ 296.92 billion) annually.
Market Competition
Apple faces stiff competition from global peers like Google, Meta, and Amazon, as well as Indian players such as PhonePe, Paytm, and BharatPe in India's digital payments space. The market has seen 20 per cent year-on-year growth in UPI transactions, driven by increasing smartphone penetration and digital adoption.
"Apple's move to restore card payments is a significant step towards integrating with India's digital ecosystem," said an industry analyst. "It paves the way for Apple Pay to compete effectively in a market dominated by local and global rivals."
