RBI’s New Guideline: PhonePe, Paytm and Cred have discontinued the facility of rent payment from their platforms. Know details

Why was rent payment an important business?

Users used credit cards to pay rent and earned reward points and cashback, while fintech companies were generating substantial profits by charging convenience fees. Banks also benefited from increased card spending. However, the RBI considered this model risky due to lack of KYC compliance and potential misuse.

What happened last year? ( RBI Rent Payment Rules )

In June 2024, HDFC Bank announced that credit card rent payments through fintech apps would incur an additional 1% fee. Following this, ICICI Bank and SBI Cards discontinued reward points for rent payments in March-April 2024. Several fintech apps, such as PhonePe, Paytm, Mobikwik, Freecharge, and Amazon Pay, suspended rent payments starting March 2024, although some later reinstated the feature with additional KYC procedures.

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What has changed now?

The new guidelines, issued on September 15, 2025, clearly state, “A PA shall ensure that a marketplace onboarded by it does not accept payments for a seller not onboarded on to the marketplace’s platform.” This means that rent payments will now be possible only if the landlord is registered as a merchant and has completed full KYC. This model is difficult in practice, so fintech companies have discontinued the service.

Direct impact on users

Users will no longer be able to pay rent using credit cards through fintech apps. They will have to revert to traditional methods like NEFT, IMPS, UPI bank transfer or cheque. Rewards and cashback benefits will also be lost.

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