RBI’s New Rules on Rent Payments via Fintech Apps
In recent years, many people in India started using apps like PhonePe, Paytm, and Cred to pay rent using their credit cards. It was easy, fast, and came with benefits like cashback and reward points. But now, the Reserve Bank of India (RBI) has introduced new rules that have changed everything.
Let’s break it down in simple terms
💳 Why Were People Paying Rent with Credit Cards? Mobile lock policy
Before we get into the new rules, let’s understand why this method became popular.
Convenience – You could pay rent from your phone in seconds.
Rewards – Many credit cards gave cashback or points for rent payments.
Cash Flow – Credit cards allowed people to pay rent even if they didn’t have enough money in their bank account at the moment.
Interest-Free Period – Users got up to 45 days to pay the credit card bill without interest.
This made rent payments through fintech apps a smart financial move for many.
📜 What Are the New RBI Rules?
On September 15, 2025, RBI released new guidelines for Payment Aggregators (PAs) and Payment Gateways (PGs). These are companies that help process payments between buyers and sellers.
Here’s what the new rules say
Only Registered Merchants Allowed – Fintech apps can now only process payments for merchants who are officially registered with them.
Full KYC Required – These merchants must complete full Know Your Customer (KYC) verification.
No Marketplace Payments – Apps cannot act as a marketplace and send money to people who are not registered merchants.
Since most landlords are not registered merchants, fintech apps can no longer send rent payments to them using credit cards.
🚫 What Does This Mean for You?
If you were using apps like PhonePe, Paytm, or Cred to pay rent with your credit card, here’s what changes You Can’t Use Credit Cards for Rent Payments on These Apps Anymore
– No More Reward Points or Cashback
– You’ll Need to Use Traditional Methods like:
– Bank transfers (NEFT, IMPS)
– UPI
– Cheques
Why Did RBI Make This Change?
RBI had several concerns:
Lack of Proper Verification – Many landlords were receiving money without full KYC checks.
Risk of Misuse – Credit cards were being used for peer-to-peer transfers, which could be risky.
Unregulated Marketplaces – Fintech apps were acting like marketplaces without proper oversight.
RBI wants to make sure that all money transfers are safe, verified, and transparent
Impact on Fintech Companies
This rule is a big change for fintech platforms:
Loss of Business- Rent payments were a major source of income for these apps.
Fewer Transactions – Credit card usage for rent was growing fast, and now it will drop.
Need for New Models – These companies may need to find new ways to offer similar services with full compliance.
Impact on Banks
Lower Credit Card Spending – Rent payments made up a big part of monthly credit card bills.
Less Fee Income – Banks earned money from transaction fees and interest.
Reward Programs Affected – Many banks had already started cutting back on rewards for rent payments even before RBI’s rule.
For example
HDFC Bank started charging a 1% fee on rent payments in June 2024.ICICI Bank and SBI Cards stopped giving reward points for rent payments earlier this year.
👨💼 Impact on Tenants
For tenants, this change means – Less Flexibility – You can’t use your credit card to manage rent payments anymore.
No Perks – You lose out on cashback, reward points, and interest-free periods.
More Hassle – You’ll need to go back to old methods like bank transfers or cheques.
🔄 Can This Service Come Back?
Maybe. But it won’t be easy
For fintech apps to offer rent payments again, landlords would need to
-Register as official merchants
-Complete full KYC
-Agree to contracts with the payment platforms
This is a lot of work, and most landlords may not want to go through the process. So, for now, it looks like rent payments through credit cards on fintech apps are gone.
What Should You Do Now?
Here are some tips to adjust to the new rules – Talk to Your Landlord ,Ask if they accept UPI or bank transfers.Plan Your Budget – Without credit card flexibility, make sure you have enough funds for rent each month.Use Other Credit Card Benefits,Focus on using your card for groceries, travel, or shopping to still earn rewards.
Watch for Updates – Fintech apps may come up with new solutions in the future.
📝 Final Thoughts
The RBI’s new rules are meant to make digital payments safer and more transparent. While it may feel inconvenient now, it’s a step toward better regulation and security.Rent payments through credit cards were a clever hack for many, but they also came with risks. As the fintech world evolves, we may see new, compliant ways to make rent payments easier again.Until then, it’s back to basics bank transfers, UPI, and cheques. RBI’s new rules stop credit card rent payments.