RBI New Rules: Following the RBI’s new regulations, credit card rent payment services from apps like PhonePe, Paytm, and CRED have been discontinued in India. Learn about the credit card rent payment guidelines.
RBI New Rules for Credit Card Rent Payments: Digital payment methods are constantly changing in India. Until now, people used fintech apps like PhonePe, Paytm, and Cred extensively to pay rent. Paying rent with a credit card earned them reward points and cashback. But now, this option has been completely discontinued. This is due to new rules from the Reserve Bank of India (RBI), which will more strictly regulate payment aggregators.
Why did rent payments stop?
In fact, the RBI recently issued a circular stating that no payment aggregator (PA) can onboard a marketplace and accept payments from sellers who have not fully completed the KYC process. Until now, fintech companies used to onboard landlords as marketplaces and process rent payments, but often the landlords’ identities were not fully verified. Now, the RBI has clarified that this practice will no longer be valid.
Changes for Users
After this rule comes into effect, tenants will no longer be able to use apps like PhonePe, Paytm, or Cred to pay rent with credit cards. This means they will have to pay rent only through netbanking, UPI, NEFT, or check. This will be a setback for those who used to earn reward points or offers by paying rent with credit cards every month.
Previous Changes
This isn’t the first time changes have been made to rent payments. In 2024, HDFC Bank began charging its credit card customers a 1% fee on rent payments, up to a limit of ₹3,000. Following this, ICICI Bank and SBI Card also discontinued reward points on rent payments. At that time, some fintech companies had reinstated this service by adding additional KYC and other requirements. However, the RBI’s new, stricter circular is now eliminating this option completely.
What will be the impact?
Rent payments had become a major business for fintech companies. Millions of users used to pay rent with credit cards every month, increasing transaction volume and revenue for companies. However, this source will be shut down under the new rules, and users will have to return to traditional methods.
This move by the RBI is intended to increase transparency and security in the digital payment system. While this will cause some inconvenience to tenants and result in business losses for fintech companies, in the long run, this change will help strengthen and secure India’s financial system.
