Leading fintech platforms, including PhonePe, Paytm and Cred, have halted rent payment services on their apps. The category had emerged as one of the fastest-growing use cases for credit card transactions in recent years.

Tenants who relied on these apps to pay rent through credit cards now face a significant disruption, as the withdrawal of these services leaves them with fewer options for digital payments.

Paying rent through credit cards had become popular as it allowed tenants to earn reward points, cashback or benefit from interest-free credit periods. But the Reserve Bank of India’s (RBI) new circular issued on September 15 has prompted the fintech companies to discontinue this facility.

What the RBI Guidelines Require

The Reserve Bank of India (RBI) tightened rules for payment aggregators (PAs) and payment gateways (PGs) on September 15, restricting them from processing transactions for entities with whom they do not have a direct contractual relationship. Under the revised guidelines, PAs and PGs can only handle payments for merchants who have completed full KYC (Know Your Customer) verification. Consequently, fintech apps can no longer facilitate rent payments

to landlords who are not officially registered as merchants, affecting tenants who previously relied on these platforms for credit card transactions.

Banks Had Already Begun Scaling Back

Even before the RBI’s directive, banks reportedly started restricting such transactions.

In June 2024, HDFC Bank informed its credit card customers through emails that rent payments made through fintech apps using credit cards would now incur a 1% fee, capped at ₹ 3,000 per transaction. ICICI Bank and SBI Cards have also discontinued reward points for rent payments made via credit cards, as per reports.

Since March 2024, several fintech platforms, including PhonePe, Paytm, Mobikwik, Freecharge and Amazon Pay, have suspended credit card-based rent payments. Some of these services later resumed, implementing stricter KYC and compliance procedures for users.

The latest RBI move is expected to affect a wide range of urban tenants who relied on the convenience and benefits of digital rent payments, signalling a return to more conventional modes of transaction.

(Edited by : Sudarsanan Mani)

First Published: Sept 18, 2025 12:01 PM IST