Amidst tussle with regulators, Apple halts plan for UPI-based payments service

Digital payments is becoming a hot segment in India so is the discussion on the implementation and regulation. As Facebook-owned instant messaging app WhatsApp and Amazon's UPI plan is coiled in regulations with RBI, tech giant Apple has reportedly pulled out itself from launching a payment service via UPI.

The US-based firm which recently hit the valuation of $1 trillion was thinking about its payment play in India since October 2017. At that time Apple's senior vice president Eddy Cue said that the company wanted to bring its payments service (Apple Pay) in the country.

She also made clear that Apple would not compete with local market leaders such as Paytm or others, instead it intended to work with them.

Now, the company will delay its launch in India and may wait for a clear view on payments regulation for foreign players by the apex regulator - Reserve Bank of India.

The banking regulator’s data localisation diktat has been forcing local and multinational companies to move their servers in India. While Indian digital payments players have already started to work in the compliance with RBI’s guidelines, the offshores players such as Mastercard, Visa, Amazon, WhatsApp and PayPal are still on disagreement.

Apple's pull off from payments service could be the outcome of Indian government’s recent remark over setting up a local presence in the country. Meanwhile, WhatsApp Pay's mass roll-out also delayed as government wants it to hire a grievance officer and set up a local base before full fledged launch.

Quoting bankers, an ET report mentioned that Apple wanted to include fingerprint as a mode of authentication for UPI payments, which NPCI did not agree to.

For UPI-based payments, a customer needs to enter a four- or six-digit number to authenticate transactions. NPCI guidelines say that biometric authentication has to be validated by the Unique Identification Authority of India (UIDAI).

After a great success in gadgets and software, India is a sure shot emerging market for Apple in terms of digital payments. The company has already launched its payments service in global market including Australia, Canada, Mainland China, France, amongst many others.

As of now, Google is the only foreign player which has been able to enter the UPI ecosystem in India. The search giant has recently renamed its UPI platform Google Tez to Google Pay.

Apart from the aforementioned players, Chinese smartphone maker Xiaomi is also seeking approval from RBI to start its payment operation Mi Pay in the country.