Patna: The Reserve Bank of India (RBI) has directed that payment aggregators and gateways can process transactions only with merchants who are directly onboarded and whose full KYC is completed. Since landlords are typically not registered merchants, rent transfers via credit cards through fintech apps are no longer allowed.
Previously, many users routed rent or personal transfers through fintech apps to earn cashback, reward points, and enjoy an interest-free period. The RBI considered these practices both risky and potentially illegal, leading to a complete halt of such services.
Impact on banks and fintech firms
The move has significant implications for banks and digital payment platforms. HDFC Bank began charging a 1% additional fee on credit card rental payments in June 2024, while ICICI Bank and SBI Cards discontinued reward points on such transactions. SBI Cards noted that rent payments formed a large chunk of its retail spending, raising concerns about pressure on fee income and earnings per share (EPS).
For fintech players, the loss is even sharper. Rent payments were among the fastest-growing use cases on their platforms, helping drive user engagement and transaction volume. With this ban, companies like PhonePe, Paytm, MobiKwik, Freecharge, Amazon Pay, and Cred will need to explore alternative services and revenue streams.
The end of credit card rent payments
Most fintech apps had already begun scaling back rent payments via credit cards. PhonePe, Paytm, MobiKwik, Freecharge, and Amazon Pay stopped the service in March 2024. With the full enforcement of RBI’s regulations in September 2025, Cred and others have also withdrawn the feature completely.
For consumers, this means the end of reward points and cashback on rent, as well as the loss of the credit period advantage. For banks and FinTech’s, it signals a need to recalibrate revenue models in an already competitive digital payments ecosystem.
