RBI just killed credit card rent payments. Here's why
If you’ve been paying your rent using credit cards on apps like PhonePe, Paytm, or Cred, that option is no longer available. The Reserve Bank of India (RBI) has introduced stricter rules for Payment Aggregators and Gateways, effective September 15, 2025.
Why Credit Card Rent Payments Are No Longer Allowed
The new rules state that payment platforms can only process transactions for merchants they have a direct contract with. Most landlords don’t qualify as official merchants with full KYC compliance, which means rent payments via these apps no longer meet the RBI guidelines.
This move is aimed at ensuring better regulatory compliance and preventing misuse of credit cards for peer-to-peer transfers disguised as rent.
How Paying Rent With Credit Cards Became Popular
Over the past few years, rent payments through credit cards had quietly become one of the hottest use cases in India. Tenants enjoyed the convenience, reward points, and cashback benefits. At the same time, fintech apps earned processing fees, and banks saw higher credit card usage.
Banks and Regulators Were Already Cracking Down
Even before the RBI circular, banks were limiting benefits:
- HDFC Bank added a 1% processing fee on rent payments
- ICICI Bank and SBI stopped offering reward points
The concern was clear: credit cards were being used for peer-to-peer transfers, which regulators considered outside the intended use of credit cards.
The 2025 RBI Circular: Clear Rules
With the latest RBI circular, the guidelines are now explicit: payments to landlords who are not fully onboarded merchants are no longer allowed. This means that the popular method of paying rent via credit card apps has officially come to an end.
What This Means for Tenants
Tenants will now have to rely on traditional payment methods:
- NEFT or RTGS transfers
- IMPS transfers
- Cheque payments
While this may be inconvenient for some, it ensures compliance with banking regulations and prevents misuse of credit cards.
