RBI Shocks Users: A major update from the Reserve Bank of India has created a buzz among tenants and landlords across the country. The RBI has issued new guidelines that directly impact rent payments made through popular UPI apps like PhonePe and Paytm. Many users who regularly pay rent using these platforms are now facing restrictions, and the sudden change has raised questions about why digital rent payments are being blocked and what new rules have come into force.
RBI Stops Rent Payments Through PhonePe and Paytm
Under the revised framework, UPI service providers have suspended rent payment options for many users. This decision has been taken after the central bank flagged concerns about unregulated transaction patterns under the Commercial Payment category. PhonePe and Paytm have reportedly removed or restricted the Rent Payment feature for lakhs of users. Screenshots shared by users show notifications stating that rent payments are no longer permitted due to regulatory compliance and updated guidelines.
Why Has the RBI Imposed This Restriction
The RBI has become increasingly strict about UPI transactions involving commercial payouts and high-value transfers. Rent payments fall under merchant categories where KYC verification and merchant classification must follow strict norms. Many users were making rent transfers to personal bank accounts without proper landlord verification, which created a compliance gap under merchant KYC rules. The RBI has asked payment apps to pause or restrict rent transfers until full verification and categorization are completed.
Impact on Daily Users and Tenants
For users who relied on PhonePe or Paytm for monthly rent payments, this change means they must now shift to alternative methods. Rent transactions through UPI carried convenience, instant receipts and cashback benefits. With the sudden pause, many are being redirected to traditional bank transfers or IMPS and NEFT transactions. Landlords who collected rent through UPI apps are also adjusting to this unexpected disruption and informing tenants to switch payment modes temporarily.
Will Rent Payments Come Back in the Future
Industry experts believe the restriction is temporary. Once full merchant KYC, rent categorization and compliance frameworks are completed by service providers, rent payments may be restored. PhonePe and Paytm are reportedly working with the RBI to implement updated verification processes. The feature is expected to return once all regulatory conditions are fulfilled and risk monitoring tools are updated for rent transactions.
What Should Users Do Now
Users are advised to use net banking methods like IMPS, NEFT or RTGS until UPI rent payment features are restored. Checking daily updates on PhonePe and Paytm may also help in tracking when the feature becomes active again. Both apps may reintroduce rent payments gradually, initially for users with verified KYC landlords or registered rental agreements.
Conclusion: RBI’s new guidelines have temporarily disrupted rent payments through PhonePe and Paytm, affecting millions of tenants across India. The change comes as part of the central bank’s push for stricter compliance, better merchant verification and safer digital transactions. Although the restriction has caused inconvenience, users can expect the feature to return once the platforms complete regulatory updates.
Disclaimer: Information may vary as apps roll out updates. Users should check the latest notifications from PhonePe, Paytm or their bank before making any transfer.
