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PhonePe, Paytm, Cred shut down rent payment feature after RBI curbs: Report
Users will no longer be able to use fintech apps to route their rent payments through credit cards and will now have to go back to online banking or cheques.
The Reserve Bank of India’s move to tighten regulations for payment aggregators has prompted some of India’s largest fintech firms, including PhonePe, Paytm and Cred, to stop rent payments on their platforms, according to a Moneycontrol report.
Rent payments have become a large-volume business with significant topline impact for fintech firms as users relied on credit cards to pay rent and earn rewards, Moneycontrol quoted industry sources as saying, but the central bank’s new rules prohibit payment aggregators from acting as marketplaces—which previously allowed them to process rent payments.
“Rent payments were basically happening because PA-PG were acting as a marketplace for landlords without merchant KYC,” sources told Moneycontrol. “That’s no longer permitted.”
Meaning, users will no longer be able to use fintech apps to route their rent payments through credit cards and will have to go back to online banking or cheques.
Rent Payments UsCredit Cards
In 2024, HDFC Bank Ltd. told its credit card customers that rent payments using their credit cards on fintech apps would attract 1% fee up to ₹3,000. Following this, ICICI Bank Ltd. and SBI Cards and Payment Services Ltd. stopped offering reward points for rent payments.
Even fintechs like PhonePe and Paytm followed suit, but some of them resumed rent payments via credit cards by adding more know-your-customer norms and compliance processes.
Now, that stops altogether.
According to an RBI circular released on 15 September, “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”.
