The new RBI circular issued on September 15, 2025, clarified the situation. Now, fintech companies will not be able to send rent payments to any landlord who is not registered as a merchant on their platform.
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RBI New Circular: If you used to pay your monthly rent via credit card using mobile apps like PhonePe, Paytm, or CRED, then you’re likely to face some difficulties now. This is because these fintech companies have discontinued their rent payment service on their apps. Paying rent via credit card had become increasingly popular in the last few years. However, following the recent implementation of new regulations by the Reserve Bank of India (RBI) regarding payment services, these fintech companies were forced to shut down this service. The RBI issued a circular on this matter on September 15.
This change will have the biggest impact on those who used to earn rewards points or enjoy interest-free credit periods by paying their rent with a credit card. They will now have to revert to older methods, such as transferring the rent directly to the landlord’s bank account or paying by cheque.
These are the new RBI rules.
According to the new RBI guidelines, payment aggregators (PAs) and payment gateways (PGs) can now only process transactions for merchants with whom they have a direct contract and who have completed their KYC (Know Your Customer) verification. This means that an app can no longer send payments to a landlord who is not officially registered as a merchant on its platform.
Rewards and cashback for rent payments
Previously, people could easily pay their rent using credit cards. This allowed them to earn reward points or cashback, and also provided a month-long credit period. The landlord would also receive the payment immediately. This made the service extremely popular. However, the RBI found this system problematic, as it lacked proper KYC verification for the landlords, and the fintech companies were essentially acting as unregulated marketplaces.
Banks were already concerned about this issue
Banks had already started taking measures to curb this practice since last year. HDFC Bank imposed a surcharge of up to 1% on rent payments made via credit cards as early as June 2024. ICICI Bank and SBI Cards also discontinued reward points for rent payments. From March 2024, several apps like PhonePe, Paytm, and Amazon Pay stopped offering this service. However, some of them later resumed the service after adding additional KYC (Know Your Customer) verification processes.
