The Reserve Bank of India (RBI) has banned the practice of paying rent through credit cards on fintech platforms, citing stricter guidelines for payment aggregators (PAs) and payment gateways (PGs).
What the New Rule Says
- On 15 September 2025, the RBI issued updated master directions stating that a Payment Aggregator must only aggregate payments for merchants with which it has a contractual relationship. Landlords not onboarded as merchants with full KYC cannot receive credit card-based payments via these platforms.
- The revised rules also require complete due diligence and KYC (Know Your Customer) for all “merchants” that PAs/PGs onboard, making it harder to process rent payments to landlords outside that framework.
Who’s Affected
- Fintech apps like PhonePe, Paytm, and CRED have already disabled rent payment via credit cards in response to the RBI’s directive.
- Platforms that were facilitating rent payments for rewards or credit history building will need to rework their service or remove it.
What This Means for Users
- Renters who used their credit cards via fintech apps to pay rent and earn reward points will have to shift back to direct bank transfers, cheques, or other modes of payment.
- The change may especially impact “new-to-credit” users who leveraged these rent payments to build credit histories.
Why the RBI Did It
- To prevent misuse arising from weak or non-existent KYC for landlords receiving credit card payments.
- To ensure that Payment Aggregators follow strong compliance norms, contractual relationships, and customer due diligence
Possible Fallout & What to Watch
- Fintech firms may lose a revenue stream from convenience fees and credit card transaction volumes in the rent-payments category.
- Landlords and tenants will need to adjust their payments systems; fintech platforms may have to build stricter onboarding, merchant verification, raising costs.
- Regulatory clarifications might follow—whether any workaround or alternative modes will be legalized, and if the restriction is permanent. NDTV Profit
