Apple has stopped accepting payments via debit and credit cards in India for subscriptions on the App store or other Apple services. This is in adherence to the Reserve Bank of India’s (RBI) guidelines on data storage.
The company will now support the country’s flagship payments system Unified Payments Interface (UPI) and net banking for in-app purchases by Indian users. In effect from June 1, neither will Apple accept credit card payments for ad campaigns on Apple Search.
Apple has also said that it will no longer store card information of Indian users on its file.
Why Apple Pay is not available in India
Several regulatory roadblocks in India have prevented Apple from launching its digital payments service, specifically designed for Apple devices.
In March 2020, the RBI restricted payment aggregators and gateways from storing customer card credentials in their database outside India. By then, India had recorded $26.7 billion worth of digital transactions. In the recent National Trade Estimate Report on Foreign Trade Barriers, the US said the RBI’s data localisation norms will act as “market access barriers, especially for smaller firms.”
Such rules will increase the cost of setting up data centres within the country for payment service providers that store and process personal information outside India. Apple does not have any data centre in India yet.
Another hurdle is India’s resistance to a biometric-based payment system, avoiding PINs or OTPs. Only fingerprint authorisation would suffice to process payments. NPCI, India’s payments regulatory body, mandates a 4 or 6-digit PIN to authorise payments.