Rent Payments on Credit Cards shut by major fintechs due to new RBI Rules

Rent payment using credit cards on apps such as PhonePe, Paytm, and CRED has been disabled following new RBI guidelines for Payment Aggregators. The change impacts those who relied on this feature to earn reward points or manage cash flow through cards.

Rent Payments on Credit Cards: What changed?

On September 15, 2025, the Reserve Bank of India issued an update to the Master Directions for Payment Aggregators (PAs) and brought it into force immediately. Overnight, some of the major fintech players, including PhonePe, Paytm, and CRED, have removed the option to pay rent using credit cards.

For years, these apps allowed tenants to route rent through their platforms and pay with credit cards, treating landlords as “merchants.” That flow is no longer permissible unless the landlord is fully onboarded and verified as a merchant under the new rules. The change has been enforced across the ecosystem, and users have begun reporting that their rent payment options via cards have disappeared.

Why has RBI stepped in?

The new rules for Payment Aggregators tighten how merchants are defined and require:

• Full KYC (Know Your Customer) checks.
• Escrow and settlement norms to safeguard transactions.
• Proper contracts between platforms and merchants.

Here is the line that defines the new lay of the land

A PA shall aggregate funds only for the merchant with whom it has a contractual relationship. PA business shall not carry out marketplace business.

Without this, landlords cannot be treated as merchants, and rent routed through cards becomes effectively a person-to-person transaction using credit card rails — something regulators are not keen on.

Why does this matter to you?

For the savvy credit card user, rent payments were a massive source of points and miles. Monthly rent running into tens of thousands could translate into premium cabin flights or luxury hotel stays when converted into rewards. This closure means:

• No more rent-linked reward points for now.
• Cashflow hacks using cards (for example, earning a 45-day float) are no longer possible.
• Rent will need to be paid through UPI, NEFT/RTGS, or direct bank transfers, none of which offer card-linked rewards.

The new changes, so far, don’t affect RedGirraffe, which works on a whole different paradigm than the fintechs. It requires a more thorough KYC and a rent agreement and does not permit a one-off payment, but instead it works on bill presentment via the BBPS.

For the RBI, the priority is keeping payment channels clean and reducing misuse of card rails. For consumers, it’s a sudden end to one of the most lucrative “manufactured spend” tricks available in India.

Bottomline

Rent payments via credit cards on apps like CRED, PhonePe, and Paytm are no longer available, at least for now. While the RBI’s move is aimed at greater transparency and compliance, the impact is immediate for some credit card users who have lost a valuable points-earning avenue.

---

Liked our articles and our efforts? Please pay an amount you are comfortable with; an amount you believe is the fair price for the content you have consumed. Please enter an amount in the box below and click on the button to pay; you can use Netbanking, Debit/Credit Cards, UPI, QR codes, or any Wallet to pay. Every contribution helps cover the cost of the content generated for your benefit.

(Important: to receive confirmation and details of your transaction, please enter a valid email address in the pop-up form that will appear after you click the ‘Pay Now’ button. For international transactions, use Paypal to process the transaction.)

We are not putting our articles behind any paywall where you are asked to pay before you read an article. We are asking you to pay after you have read the article if you are satisfied with the quality and our efforts.