Across India’s rental landscape, a silent digital revolution is taking place. Rent payments that previously exchanged hands in cash or cheque are now moving seamlessly through digital platforms, recorded, time-stamped, and automated. For many, this marks progress, a step toward transparency, efficiency as well as integration into the formal financial ecosystem. Yet, beneath this shift lies a widening gap that speaks to one of the most urgent issues of the digital age: inclusion.
In the rush towards digitisation, not every tenant has been able to keep pace. Those without access to stable internet connections, formal banking channels, or the confidence to navigate digital systems are being left on the margins of convenience. The same technological innovation that simplifies life for many has made it increasingly complicated for others.
This digital divide in rent though is not merely a technological disparity. It highlights deeper social and economic inequalities. It decides who can participate fully in the digital economy and who risks exclusion from it. As housing transactions increasingly turn digital, it is important to address this divide as this has become more than a financial concern. Rather, it is the key to developing a more equitable and resilient rental ecosystem.
A Market on the Move: India’s Digital Acceleration
India’s digital economy has witnessed an extraordinary leap in the last decade. The success of the Unified Payments Interface (UPI), which processed over ₹24.85 lakh crore in transactions in August 2025, is a demonstration of the nation’s swift digital transformation. From online grocery payments to rent transfers, digital adoption has significantly redefined convenience and brought inclusion. For urban renters, app-based systems and digital receipts have superseded physical ledgers, ensuring real-time documentation and transparency.
Nonetheless, this progress continues to be inequitable. India’s rental housing ecosystem, which accounts for 20 per cent of all urban homes, still operates majorly within informal structures. According to industry estimates, around 70 per cent of tenants continue to pay rent in cash. This is more evident in Tier 2 and 3 cities, where both landlords and tenants remain outside formal payment channels. The benefits of digitisation, therefore, are concentrated in urban clusters, while the rest of the market continues to rely on conventional methods.
This imbalance reflects a familiar pattern, where the speed at which innovation takes place outstrips the pace of inclusion. Digital adoption is surging, but digital equity remains a work in progress.
The Hidden Cost of Exclusion
The increasing dependency on online rent payment apps has changed the way people transact. It has also brought in newer opportunities. For those who are digitally literate, each rent payment now builds a verifiable financial footprint — one that contributes to Rent Credit Scores and access to future loans. However, for those who still rely on cash, these transactions remain invisible in the eyes of the formal financial system.
This kind of invisibility carries long-term costs. Rent, being the largest recurring expense for an individual or family, could be a critical data point for financial inclusion. When paid digitally, it can help tenants qualify for small-ticket credit, housing loans, or government benefits. But when done in cash, it reinforces exclusion — keeping them outside the formal economy even as the rest of the nation goes digital.
The unorganised rental sector remains especially vulnerable. This is because it largely consists of migrant workers, daily-wage earners, and first-time urban residents. In the absence of formal rental agreements, digital payments become complex. Moreover, tenants are excluded from benefits such as credit-linked housing subsidies under schemes like PMAY (Pradhan Mantri Awas Yojana) or rent reporting systems that could enhance their financial credibility.
Barriers Beyond Connectivity
It is easy to presume that the digital divide originates from a lack of smartphones or internet connectivity. However, the reality is far more nuanced. Access does not automatically translate into adoption. In rural areas, around 79.2 per cent of males and 75.6 per cent of females in the age group ‘15 years and above’ own a smartphone. However, only a small percentage of them are comfortable conducting online financial transactions.
In the rental context, this translates into hesitation and mistrust, showing limited confidence in digital tools. Elderly landlords may still prefer cash or cheques due to fear of fraud or taxation. Tenants, particularly those from low-income groups, may be wary of failed transfers, hidden charges, or unfamiliar apps. Many prefer physical proof, like a handwritten receipt or an in-person exchange, as reassurance that the payment has truly gone through.
The challenge, therefore, is not only infrastructural but also behavioural. For digital inclusion to take charge, it must first build trust: a process that demands patience, education, and empathetic design.
Bridging the Divide: Policy, Platforms, and People
India’s journey toward financial inclusion has demonstrated that large-scale transformation is possible when access, awareness and affordability move together. Schemes like Jan Dhan Yojana, Digital India, and BharatNet have already brought millions into the formal banking and internet ecosystem. The next phase lies in extending this empowerment to the rental economy.
Government partnerships with fintech and proptech firms can accelerate this shift. They can create simplified and multilingual rent payment interfaces that work seamlessly even on low-bandwidth connections. Financial literacy campaigns, especially those targeting women and rural tenants, can demystify digital payments and feature their long-term benefits. Simultaneously, local authorities can incentivise digital adoption through reduced transaction fees or recognition under housing welfare schemes.
For private platforms, the responsibility goes beyond providing convenience. Designing for inclusion means accommodating users with limited literacy, providing assisted modes of payment, together with embedding awareness-building into each transaction. The aim should be to make digital rent systems intuitive enough for a first-time user in a Tier 3 town to feel the same confidence as a salaried tenant in a metro city.
Toward an Inclusive Digital Rent Framework
In order to build an inclusive rental ecosystem, three principles must work in harmony: accessibility, trust, and enablement. These aren’t standalone ideas. They effectively strengthen each other. Accessibility starts with the basics: reliable internet, easy-to-use digital tools, and simple ways to get started. Trust develops when people can communicate clearly, access support in their own language, and rely on systems that resolve issues fairly. Enablement happens when going digital brings real rewards, whether it’s access to credit, a verified rental record, or the chance to gain advantage from government housing initiatives.
The integration of rent payments into credit bureaus and fintech databases, already gaining traction in India, could be a decisive step. By considering rent as a form of recurring financial discipline, digital records can aid tenants. Especially those in informal housing can gain visibility in the credit ecosystem. With time, this can convert rent from a recurring expense into a path toward financial empowerment.
Making Progress Meaningful
India’s digital success is built on ambition, resilience as well as innovation. Yet, as digital payments soar, there’s an important question to consider: Is everyone being brought along? The gap between those who can pay rent online and those who cannot is no longer a technological problem. Rather, it actually highlights intricate inequalities in access, education, and opportunity.
Bridging this divide is not about replacing cash with code; it is about ensuring that technology serves as a bridge, not a barrier. When every tenant, from metropolitan apartments to small-town dwellings, can transact securely, build credibility while accessing opportunities through digital rent systems, inclusion will move from aspiration to achievement.
India’s next chapter of financial transformation will not be defined by how quickly people digitise, but by how inclusively we do it.