Fintech companies PhonePe, PayTM, and Cred have halted their rent payment services, particularly those using credit cards, following new curbs imposed by the Reserve Bank of India (RBI), according to a Money Control report. The shutdown comes soon after the RBI issued master directions on September 15, 2025, concerning payment aggregators (PAs) and payment gateways (PGs), which tighten rules around Know Your Customer (KYC) and merchant onboarding.
Under the new RBI framework, a key requirement is that “a PA shall ensure that a marketplace onboarded by it does not accept payments for a seller not onboarded onto the marketplace’s platform”.
Moreover, the directions stipulate that PAs may aggregate funds only for merchants with whom they have a contractual relationship; PA businesses must not operate as a marketplace in the sense of facilitating transactions for non-onboarded sellers.
Because many landlords may not have completed full merchant KYC or contractual onboarding, the fintechs found themselves unable to comply without overhauling operations. As a result, rent payments via credit cards through these apps have been discontinued.
Impact On The Industry
Industry insiders warn that the halt to rent payment services will hit fintech revenues significantly, especially for services built around credit card reward schemes. A Moneycontrol source said rent payments “had become a large-volume business with significant topline impact for fintechs, as users relied on credit cards to pay rent and earn rewards.”
Meanwhile, Entrackr quoted a source saying CRED and PhonePe were among the most affected, “as they were the leading platforms facilitating rent payments through credit cards”.
Moreover, experts note that because the new rules require full KYC and contractual onboarding of landlords, fintechs now face higher compliance costs. As one source told NDTV: “Re-KYC will be too expensive and cumbersome at this stage. It is easier to stop these payments now, rather than fall afoul of the regulatory requirements.”
For landlords and renters, the change means lost convenience and reduced flexibility. Renters who used credit cards for rewards or cash flow management will need to revert to bank transfers, cheques, or UPI. Landlords may find delays or additional friction in receiving payments if they must become formally onboarded.
New RBI PA Guidelines on KYC
The RBI’s new guidelines on payment aggregators introduce stricter KYC requirements. Specifically, the framework mandates that PAs conduct thorough due diligence on all merchants in line with the RBI’s Master Direction on KYC. Therefore, PAs must retrieve KYC records from the Central KYC Records Registry and adhere to strict procedures for any outdated or unavailable information.
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Furthermore, PAs must perform background checks on merchants and continuously monitor their transactions to ensure they align with the…
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