SBI Apple Pay Update: Bank Opts Out of Partnership After Evaluating Commercial Terms, Backs UPI MDR

State Bank of India (SBI) has decided against joining the Apple Pay ecosystem for now after evaluating the commercial terms of a potential partnership, Managing Director Rama Mohan Rao Amara said. The country’s largest lender had an opportunity to explore a tie-up with Apple Pay before the service launched in India with Axis Bank, but ultimately chose not to participate.

SBI’s decision comes shortly after Apple Pay’s India launch, putting the bank’s commercial assessment of the platform in focus. Amara said the decision was a considered call within the bank and could change depending on how the ecosystem develops.

At the same time, SBI is backing the new UPI merchant discount rate (MDR) framework, with Amara saying the 0.4% charge on eligible UPI merchant transactions above ₹2,000 from October 15 will help offset the bank’s digital infrastructure costs rather than serve as a major revenue generator. The bank says it is technically ready to operationalise the new MDR.

SBI Apple Pay Partnership Decision

SBI had evaluated the possibility of partnering with Apple Pay and looked at the commercial terms before deciding not to participate at this stage.

Apple Pay launched in India with Axis Bank as its first banking partner. The service allows eligible customers to use supported cards through Apple devices, bringing Apple’s payment platform into India’s rapidly expanding digital payments market.

For SBI, the decision comes down to the economics of participating in the ecosystem. Amara said the bank had the opportunity to assess the partnership but decided that, as of now, it would not join Apple Pay. He added that the position could change as the market and ecosystem evolve.

SBI UPI MDR From October 15

SBI is preparing for the implementation of a 0.4% MDR on specified person-to-merchant UPI transactions above ₹2,000 from October 15. The charge will be paid within the merchant payments ecosystem, while customers will not be charged the MDR directly.

Amara said 96% of SBI’s P2M UPI transactions are currently up to ₹2,000 and will remain exempt under the new framework. Certain essential-service transactions, including fuel and railways, will attract a flat ₹5 MDR, while the charge will be capped at ₹300 for applicable transactions.

The bank expects the new MDR to partly offset the substantial costs involved in maintaining and strengthening its digital payments infrastructure. Amara pointed to spending on cybersecurity, fraud prevention and risk management, with industry estimates putting the cost of shared UPI infrastructure at around ₹15,000 crore to ₹20,000 crore.

SBI UPI Market Share And Digital Payments

SBI has around 27% market share on the remitter side of UPI, according to Amara. Its presence in merchant acquisition is smaller, but the introduction of MDR could create an opportunity for the bank to expand its role across the payments value chain.

Amara said SBI is not viewing the new MDR primarily as a revenue generator. Instead, the bank expects the charges to help recover part of the costs of operating the payments infrastructure, while also supporting further investments in innovation and value-added services.

The revised MDR framework is designed to keep UPI free for consumers and most low-value merchant payments. Payments to merchants up to ₹2,000 and transactions covered under the small-merchant exemption will remain free, with around 96% of P2M transactions expected to remain unaffected.

Also Read - Nykaa Q2 FY 2026-27 Results Update Signals Late-20s Revenue Growth as Fashion Business Accelerates