RBI Pulls the Plug on Rent, Gameskraft’s Lay Off, and PayU Increases Stake

The recent decision by major Indian fintech players like CRED, PhonePe, and Paytm to halt rent payments via credit cards is more than a feature rollback - it’s a sharp reminder of the fragile balance between innovation and regulation in India’s fintech ecosystem. At first glance, it looks like a service outage. In reality, it’s an inflection point that highlights how regulators, startups, and users are negotiating the boundaries of convenience, compliance, and risk.

The trigger was the Reserve Bank of India’s master direction on payment aggregators, which insisted on full KYC for all merchants. By treating landlords as “merchants,” fintech platforms had created a grey zone. In practice, most landlords were individuals, not businesses, and conducting full KYC on millions of them is not just costly, it’s unscalable. The loophole was being exploited too. Manufactured spending had become widespread - users routing money to friends or family under the pretense of rent just to unlock reward points, meet minimum spends, or roll over liquidity. One industry estimate suggested that as much as 20-25% of rent transactions weren’t real rent at all. The RBI saw the writing on the wall and decided to clamp down. There’s also a larger push at play. By nudging these transactions into the Bharat Bill Payment System (BBPS), RBI is building standardized rails with stronger oversight and clearer audit trails.

For fintechs, this decision strikes directly at both revenues and engagement. Rent is one of the highest-value recurring payments in an urban user’s life, often between ₹15,000 and ₹75,000 in Tier-1 cities. A convenience fee of 1-2.5% meant serious money. Platforms like CRED were making hundreds of crores in annualized GMV from rent alone. For CRED, already under pressure after a brutal down round in mid-2025, this was more than an ancillary revenue line - it was one of the few monetizable features tethering its affluent user base. For PhonePe and Paytm, the direct revenue impact is smaller, but the bigger loss is engagement. Rent was sticky. Once a user paid rent on an app, they returned every month without fail. Losing that predictable touchpoint dents retention, and with it, long-term valuations.

The reason fintechs rushed into rent payments in the first place was simple. Rent is high-value, recurring, and emotionally important. Tenants loved the credit card float - the 45-day interest-free period often helped manage month-end crunches. Rewards sweetened the deal. For platforms, the benefit went beyond fees. Knowing a user’s rent was like holding an X-ray of their financial life. A tenant paying ₹60,000 rent in Koramangala was a prime candidate for a pre-approved loan, wealth product, or premium card. That data value chain is now disrupted, and fintechs must scramble for new hooks.

Globally, paying rent via credit cards isn’t unusual. In the U.S., companies like Plastiq and Zillow Rentals built businesses on it. Singapore and Hong Kong allow it with limits and caps. The difference is context. In more mature financial systems, fraud is lower and enforcement often happens after the fact. India’s reality is different: massive scale, a price-sensitive consumer base, and a culture of gaming credit systems. When tens of thousands of users started manufacturing spends, the regulator didn’t bother with nuance. It swung the hammer.

Competitively, the fallout is broad. Startups like NoBroker and Housing.com, which leaned on rent payments as acquisition engines, now face a vacuum. Neobanks like Fi and Jupiter, which pitched rent as a financial lifestyle feature, will need fresh plays. Even banks lose indirectly. Many card issuers relied on rent to boost usage and justify fee waivers. Ironically, fintechs may lose fees, but banks may lose swipe volume.

What happens next is still unfolding. In the short run, most players will quietly drop the service. No one wants to provoke a regulator, especially after the Paytm Payments Bank episode. In the medium run, workarounds may appear - partnerships with centralized KYC registries, video KYC for landlords, or routing through BBPS once rent gets formally added. In the long run, rent will likely become part of a regulated utility stack with caps and guardrails. The freewheeling era of paying “rent” to your cousin to unlock Amex points is over.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Sochna Kya Jo Bhi Hoga Dekha Jaayega”: Now, Gameskraft Lays Off 120 Employees

Gameskraft has swung the axe on 120 employees, blaming India’s ban on real-money gaming for forcing a shutdown and restructure. To soften the blow, the company is keeping health insurance active till March 2026, wellness services till May, and pitching in with job placements.

The move follows earlier turbulence, like pausing its poker arm Pocket52 after the steep 28% GST slapped on bets last year.

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“Aapka Kya Hoga Janab-e-ali”: PhonePe, Paytm & CRED Halt Rent Payments Via Credit Cards

PhonePe, Paytm, and CRED have quietly pulled the plug on rent payments via credit cards after RBI’s new rules kicked in.

Since most landlords aren’t onboarded with full KYC, fintechs can no longer route these payments through their platforms. That’s a hit to a once-lucrative segment, where convenience fees and big-ticket card spends kept the cash registers ringing.

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“Thank Ye For Thy Service”: Groww Doled Out INR 614 Cr In Bonus To Cofounders In FY25

Groww handed its cofounders a hefty INR 614 Cr bonus in FY25, just as it gears up for its IPO. CEO Lalit Keshre topped the payout charts with INR 188.64 Cr, while his fellow cofounders also took home nine-figure sums.

Adding to the windfall, the quartet pocketed another INR 104 Cr by selling stakes ahead of the IPO filing.

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“Janmo Ke Saathi”: PayU Increases Stake In Mindgate To 70%

PayU has upped its stake in Mindgate to 70%, leaving the remaining 30% with cofounders George Sam and Guhan Muthusamy, who will continue steering the ship. The fintech giant now wants Mindgate to double down on credit products for UPI, riding on its recent growth streak.

In FY25, Mindgate clocked 40% revenue growth and doubled EBITDA, after posting INR 23 Cr profit on INR 260 Cr revenue the previous year.

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1. IFC will pump $25 Mn into Trifecta Capital’s fourth venture debt fund, pegged at INR 2000 Cr. The fund aims to back over 100 startups across EV, deeptech, climate tech, and AI with ticket sizes of INR 25-30 Cr.
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2. Electric motorcycle manufacturer Raptee has received undisclosed funding from the science and technology ministry's Technology Development Board (TDB). Raptee said it has become the first EV motorcycle OEM in the country to receive financing from the TDB.
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3. Infra.Market is set to raise $83 Mn in a Series G round from Silverline Homes, Nikhil Kamath’s NK Squared, Tiger Global, Accel, and Nexus at a $2.8 Bn valuation. The construction tech unicorn is also expected to file its DRHP next month.
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4. Blue Energy Motors has raised $30 Mn from Nikhil Kamath and Omnitex Industries to scale up production of its LNG and electric heavy-duty trucks. The Essar-backed firm, with a current capacity of 10,000 trucks a year, aims to expand manufacturing.
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5. D2C nutrition brand Supply6 has raised Rs 9.1 Cr in a seed round led by Zeropearl VC, with backing from entrepreneurs like Kunal Shah and Renee Cosmetics’ cofounders. The startup offers science-backed products aimed at filling everyday nutrient gaps.
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6. Atomicwork has secured a strategic investment from Okta Ventures to push its vision of reinventing enterprise IT. The partnership will help IT teams deliver seamless, secure, and personalized support across apps, channels, and devices.
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7. EvoluteIQ has raised $53 Mn in a funding round led by Baird Capital to fuel its global expansion. The AI platform aims to strengthen its position in enterprise-grade, agentic AI-led automation.
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