If you used to pay your house rent every month using a credit card through PhonePe, Paytm, Cred, or other apps, you may be in for a big shock. These fintech platforms have begun shutting down their rent payment services – and the reason is the Reserve Bank of India...

National Desk: If you used to pay your house rent every month using a credit card through PhonePe, Paytm, Cred, or other apps, you may be in for a big shock. These fintech platforms have begun shutting down their rent payment services – thanks to new rules recently implemented by the Reserve Bank of India (RBI).

RBI's new rule: Now 'confirmed identity' will be required in every transaction

The RBI circular issued on September 15, 2025, states that now payment aggregators (PAs) and payment gateways (PGs) can transact only with those merchants with whom they have a direct contract and whose full KYC (Know Your Customer) process has been completed.

This means that fintech apps can no longer send rent to a landlord who is not registered as an authorized merchant on their platform. This means strict identification of both the sender and the receiver of rent is now required.

Why was paying rent with a credit card so popular?

In years past, many people used to pay rent with credit cards because:

• They used to get reward points and cashback.
• Money was available on loan without interest for the entire month.
• The landlord would get the payment immediately.
• Transactions were completely digital and trackable.

But now all these benefits are gradually stopping.

Banks had already indicated

The banking sector had started to tighten the reins on this feature before fintech apps:

• HDFC Bank imposed a 1% fee on credit card rental payments in June 2024.
• ICICI Bank and SBI cards stopped giving reward points.
• In March 2024, several apps like PhonePe, Paytm, Credi, and Amazon Pay temporarily stopped this service.
• Some apps later resumed service with KYC improvements, but now that too is being shut down.

Impact on users: Break on both rewards and cashflow

These changes will most impact people who:

• Used to use credit card to pay rent every month.
• Reward points were used to avail benefits like travel, shopping and recharge.
• 'Credit period' was used to manage financial flow.

Now they will have to go back to the old methods – like bank transfer, cheque, or UPI payments, which will not offer any rewards.

Fintech model also affected

These RBI guidelines will also affect the business model of fintech companies:-

• Now they cannot send payments to landlords like in the marketplace model.
• They will have to do business registration and KYC in every transaction.
• This will increase their operational costs and hamper user experience.

-Fintech companies are now exploring options to restart rent payment services while complying with these regulations.

-Users are advised to talk to their landlord about other digital payment options.

-This could be an opportunity for banks to bring new solutions in this space.

PC:Punjab Kesari