Rent Payments via Credit Cards Suspended by CRED, PhonePe, and Paytm

CRED, PhonePe, and Paytm have stopped processing rent payments through credit cards on their platforms, as reported by three sources familiar with the situation. This decision comes in light of the Reserve Bank of India’s (RBI) recent guidelines concerning payment aggregator regulations.

Regulatory Changes Prompt Suspension

Startup Superb tested the capability for rent payments via credit card on these applications and discovered that the service is currently unavailable. A source mentioned that CRED, PhonePe, and Paytm halted their rent payment service just two days after the issuance of the new regulations. Although the companies technically have until later this year to comply, they chose to act swiftly due to regulatory pressure.

KYC Requirements and Compliance Challenges

According to RBI’s instructions regarding KYC and due diligence for payment aggregators (PA), a PA is required to ensure that any marketplace it collaborates with does not process payments for sellers who are not part of the platform. Consequently, applications like CRED, PhonePe, and Paytm must conduct KYC for landlords, a process that proves to be both costly and intricate.

Future Implications for Other Platforms

Sources have indicated that NoBroker and Housing are also likely to suspend rent payments using credit cards in the subsequent weeks. CRED and PhonePe are anticipated to experience the most significant impact, as they were previously leading platforms in facilitating rent payments through credit cards.

Awaiting Responses from the Companies

Queries directed to PhonePe, Paytm, and CRED have not yet received an immediate response. The situation will be updated as soon as they provide a response.