RBI Halt Rent Payment via Credit Card on Fintech Apps: Check Alternatives, and Other Aspects You Should Know

On September 15, 2025, the Reserve Bank of India (RBI) issued a guideline for payment aggregators, which barred fintech platforms such as PhonePe, Paytm, Cred, and Amazon Pay from providing rent payments via credit cards. 

What Triggered This Change?

Under the RBI’s updated Payment Aggregator (PA) guidelines, only merchants with a direct contractual agreement with the payment aggregator can receive credit card payments. Since landlords typically aren't registered as merchants, platforms can no longer facilitate credit card rent payments to them.

Additionally, the RBI expressed concerns about Know Your Customer (KYC) compliance, pointing out that these transactions often bypassed standard verification protocols.

Now the question is, how can such transactions be processed?. For your read, we have collated frequently asked questions (FAQs) in this regard

How Did It Work Earlier?

Previously, fintech apps like Cred, PhonePe, and Paytm allowed tenants to pay their rent using credit cards. These platforms would charge the tenant’s card and transfer the funds directly to the landlord’s bank account.

This method gained popularity for several reasons:

• Reward points or cashback on rent payments
• Interest-free credit period on card transactions
• Better cash flow management for users

Were Banks Already Restricting Such Payments?

Yes. Even before the RBI stepped in, banks had started tightening their policies:

• HDFC Bank (June 2024): Introduced a 1% fee (capped at ₹3,000) for rent payments made via credit cards on third-party platforms.
• ICICI Bank & SBI Cards: Discontinued reward points on rent transactions.
• SBI Cards:

1. Rent accounted for a significant portion of retail spending in FY23 (avg. ₹20–21K per transaction).
2. Increased fees: From ₹99 → ₹199 → ₹200
3. Noted a slowdown in the growth of rent-related spending compared to other retail categories.

Which Platforms Have Suspended the Service?

• March 2024: PhonePe, Paytm, Amazon Pay, Freecharge, and Mobikwik stopped offering rent payments via credit card.
• September 2025: Cred and other remaining players have now completely withdrawn this feature in compliance with the RBI directive.

What Does This Mean for Tenants and the Ecosystem?

• Tenants: Can no longer use credit cards for rent payments on fintech apps, losing out on perks like rewards and interest-free periods.
• Banks: May see a minor dip in fee-based income, with analysts forecasting potential EPS (earnings per share) pressure for issuers like SBI Cards.
• Fintechs: Need to rethink their offerings, as rent payments have been among the fastest-growing use cases.

Also Read: PhonePe, Paytm, and Cred Halt Rent Payment Services After New RBI Rules

What Are the Alternatives?

While credit card-based rent payments are off the table for now, tenants still have several conventional options:

• UPI
• NEFT, RTGS, or IMPS
• Cheque payments
• Standing instructions from bank accounts

However, none of these provide the same benefits in terms of rewards, credit cycles, or liquidity.

Conclusion

The RBI's move aims to bring greater oversight and regulatory discipline to payment flows. While this strengthens compliance and transparency, it also disrupts a popular convenience for urban renters.

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