3 min read
What Apple Pay would actually cost Pakistani banks
Apple does not charge cardholders for Apple Pay. It charges issuers, out of interchange they already earn. In a thin-margin market that is the entire negotiation.
By the FounderDuels team ·
The most common misunderstanding about Apple Pay is that it is free. For the person tapping the phone, it is. For the bank that issued the card, it is not, and that fee is the reason Apple Pay launches years later in some countries than others.
How the money moves
When you pay by card, the merchant pays a merchant discount rate to its acquiring bank. Most of that is passed to the bank that issued your card, as interchange. Interchange is the issuing bank's revenue for carrying the credit risk, running the fraud systems, and issuing the plastic in the first place.
Apple Pay takes a slice of that interchange. Not an extra charge on the merchant, not a fee to the cardholder — a share of what the issuer was already earning.
The numbers from the India negotiation
The Indian launch gives us actual figures rather than speculation. Reporting on the negotiations had Apple seeking roughly 15–20 basis points per transaction, with major Indian banks countering at around 10.
To see why that is contentious, note the denominator: the entire payments layer in India runs on something in the region of 40–50 basis points of margin. Apple asking for 20 is asking for a third to a half of the whole margin pool, for the part of the transaction it does not underwrite, does not carry risk on, and does not settle.
Banks did not refuse because they are short-sighted. They refused because the arithmetic is genuinely hard.
Why Pakistan is harder, not easier
Three reasons.
Interchange is thinner. Pakistani card economics are not more generous than India's. Whatever share Apple asks for comes out of a smaller pool.
The spend base is small. Card usage in Pakistan is concentrated and low-frequency. PayPak holds more than a quarter of the country's 53 million debit cards and carries about 6% of card usage. A basis-point fee on a small base is a small absolute number — which cuts both ways: it is cheap for the banks to concede, and not obviously worth much to Apple.
The alternative is free. This is the structural problem. Raast, the State Bank's instant-payment rail, processed 742 million transactions worth Rs23.27 trillion in a single quarter of FY26, and Raast P2M is being actively subsidised — the SBP allocated Rs3.5 billion for QR incentives in FY2025-26, and daily person-to-merchant transactions went from roughly 60,000 in June 2025 to about 1.1 million by June 2026.
A merchant choosing between a card transaction with interchange and a Raast QR transaction that is being actively subsidised is not choosing on convenience alone. Apple Pay rides on the expensive rail, in a market being deliberately steered onto the cheap one.
What a bank actually gets for the fee
It is not nothing, and Pakistani banks weighing this should be honest about the upside too.
- Card-on-phone wins the default. The card in the Wallet is the card that gets used, and displacing it later is hard.
- Fraud goes down. Tokenised transactions do not expose the card number, and card-not-present fraud is the expensive kind.
- It attracts the right customer. The Pakistani iPhone base skews heavily towards high-income, high-spend, urban customers. That is the segment banks compete hardest for.
The question is not whether those are worth something. It is whether they are worth 15–20 basis points of interchange forever, agreed now, on a market that has not yet been shown to convert.
The likely outcome
The Indian pattern suggests what happens next: one or two banks accept terms to be first and take the marketing win, the largest issuers hold out, and the rest sign later once the launch has proved the volume. That is not a prediction about Pakistan. It is the only comparable precedent, and it is three weeks old.
Sources
- Countries and regions that support Apple Pay — Apple Support
- iOS 27 Beta 5 Code Hints at Apple Pay Coming to Pakistan — iThinkDiff
- Apple Pay Coming to Pakistan: PayPak Found in iOS 27 Code — TechJuice
- PayPak — 1LINK
- Raast: Pakistan's Instant Payment System — State Bank of Pakistan
- Apple Pay finally launches in India after years on the sidelines — TechCrunch
Published by FounderDuels. Corrections: [email protected]
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