The Reserve Bank of India (RBI) recently implemented new rules, tightening the payment system. These changes have a direct impact on rent payments. Customers will no longer be able to pay rent using their credit cards through fintech apps like PhonePe, Paytm, CRED, or Amazon Pay.
Why the facility was discontinued
Previously, people used credit cards to not only pay rent, but also to earn reward points and benefit from interest-free periods. The RBI found that this facility was often being used for non-business transactions. Now, payments will only be allowed through registered merchants and accounts with complete KYC.
Key points of the new rules
According to the new RBI rules, payment gateways and payment aggregators can only process transactions with merchants who have complete documentation and registration. Since landlords are typically not registered merchants, rent payments using credit cards through fintech apps will no longer be possible.
Impact on customers
This change is a major setback for customers. Now they will neither receive reward points nor additional cashback. Many people used to benefit by sending money to the accounts of relatives or friends without KYC, which the RBI considered unsafe and against the rules. The new system will only promote transparent and secure transactions.
Options for Landlords and Tenants
Net banking, UPI, debit cards, and direct bank transfers will now be the primary options for rent payments. This change will force both landlords and tenants to return to traditional methods. However, this will reduce the chances of fraud and risky transactions.
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This move by the RBI is aimed at making fintech services more transparent and secure. Although customers will lose rewards and convenience, this change could prove positive for the Indian payment ecosystem in the long run.
Disclaimer: The information provided in this article is based on official RBI guidelines and media reports. Please check the RBI’s official website for any final decisions or updates.
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