RBI’s new rules hit credit card rent payments: PhonePe, Paytm, CRED, Amazon Pay suspend service

Fintech platforms pause rent payments via credit cards as RBI enforces stricter Payment Aggregator (PA) and Payment Gateway (PG) guidelines from September 15.

In a major move impacting credit card users across India, the Reserve Bank of India (RBI) has brought rent payments through major fintech apps like PhonePe, Paytm, CRED, and Amazon Pay to a halt. The decision follows the implementation of the central bank’s new Payment Aggregator (PA) and Payment Gateway (PG) guidelines that came into effect on September 15.

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For years, fintech platforms had made rent payments convenient, offering reward points and cashback to users paying rent via credit cards. However, under the revised rules, payment aggregators are now allowed to pool funds only from merchants with whom they have direct agreements. RBI has clarified that PAs cannot function like marketplaces, forcing fintechs to temporarily suspend their rental payment services.

The new regulations make full KYC (Know Your Customer) mandatory for anyone making rent payments through these apps. This decision stems from growing concerns over fraud and misuse of credit card rent transactions. RBI observed that some users were transferring money to relatives under the pretext of rent and later using it for unlawful purposes. The regulator believes these tighter norms will ensure transparency and safeguard the financial system.

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This move is expected to impact thousands of urban users who rely on credit card rent payment services for cash flow management, but industry experts believe it will also bring much-needed discipline and prevent potential money laundering risks.