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Apple Explores Launching Apple Card in India, Engaging in Talks with HDFC Bank and Regulators

Apple, the renowned technology giant, is reportedly in discussions with Indian banks and regulators to introduce its highly acclaimed credit card, the "Apple Card," in India. During his visit to the country in April, Apple's CEO, Tim Cook, met with HDFC Bank's CEO and MD, Sashidhar Jagdishan, indicating the company's serious intent. Additionally, Apple is engaging in talks with the National Payments Corporation of India (NPCI) to explore the potential launch of Apple Pay, a digital payment service. These developments highlight Apple's keen interest in expanding its presence in India's growing payments sector, which has witnessed a surge in mobile-based transactions.

Apple is in the early stages of discussions regarding a co-branded credit card with HDFC Bank, one of India's leading banks, according to sources familiar with the matter. The details of these discussions, including potential compromises required to adhere to Indian regulations, remain uncertain. The Reserve Bank of India (RBI) has reportedly been engaged in talks with Apple to establish the necessary procedures for launching the card. However, the exact channels through which these discussions took place, whether directly with the RBI or through Apple's banking partner, are yet to be determined.

If successfully launched, the Apple Card could significantly impact Apple's revenue in India. With iPhone sales already experiencing rapid growth, Apple's revenue in the country reached approximately Rs 50,000 crore ($6 billion USD) in FY23, representing a 50% increase from FY22. Leveraging the popularity of the Apple Card among Indian smartphone users could lead to a substantial shift in transactions through the card, thus influencing Apple's position in the Indian market.

India's strategic importance to Apple stems from various factors. The company recently inaugurated exclusive retail stores in Delhi and Mumbai, further solidifying its commitment to the Indian market. Moreover, Apple has been gradually shifting a significant portion of its iPhone production to India, with projections indicating that nearly 25% of Apple's global mobile phone production will be based in the country within the next few years. With India having the potential to become Apple's third-largest market, after the US and China, the launch of the Apple Card could capitalize on this growth trajectory.

Apple's decision to explore launching its own credit card in India stems from the challenges it faces in accepting card payments due to regulatory guidelines. The RBI's directives require third-party websites to tokenize card details and store payment data exclusively on Indian servers. Additionally, the RBI has mandated one-time customer permission through OTP for standing instructions, making UPI a more seamless payment option for Apple customers. By considering the launch of its own credit card, Apple aims to pre-empt the use of other credit cards on its platform and overcome these regulatory hurdles.

Launching the Apple Card in India would necessitate certain compromises compared to the card's US version. Indian regulations would require the inclusion of the bank's name, such as HDFC Bank, alongside Apple's branding. Furthermore, the card cannot omit a printed card number as per current co-branded credit card regulations. While the Indian banks are eager to collaborate with Apple, they may not be able to offer substantial privileges due to the strict regulatory environment. However, the Apple Card's integration with Apple Pay and its attractive rewards program, including cashback on Apple purchases, presents an appealing proposition for potential customers.

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