What is Payment Gateway?
A payment gateway is the technical layer that lets a business accept payments online. When a customer enters card details on a checkout page or approves a payment in an app, the gateway encrypts the data, sends it to the card network or bank for authorisation and returns an approval or decline. Many providers combine a gateway with an aggregator service, which collects the money on behalf of many merchants and settles it to their bank accounts after deducting fees.
In everyday use, "payment gateway" often refers to the whole package: checkout, card acceptance, invoicing links, subscriptions and settlement.
Why it matters for exporters
If you sell services internationally, a gateway or platform that accepts foreign cards can make it easy for clients to pay an invoice link. The money then travels to India through the provider, which settles rupees or foreign currency into your bank account, usually in batches and net of fees.
That convenience has a compliance side. For EDF purposes, your bank needs to tie each export invoice to a realisation. Settlements from a gateway may club several clients' payments together, carry a purpose code assigned by the provider and arrive after fees and conversion. Keep the provider's settlement reports that show which invoices each payout covers, and confirm with your AD bank and the provider how realisations will be evidenced, for example through the provider's own advice or a FIRA-type document. Our fact sheet does not set a platform-specific procedure.
Example
Zephyr Courses, a proprietorship selling live coding workshops, bills an Australian company AUD 2,400 through a card payment link. The provider settles ₹1,29,500 to Zephyr's current account four days later, net of fees and conversion, in a batch with two other payments. Zephyr downloads the settlement report, matches each payment to its invoice and keeps it with its monthly EDF records.
Common confusion
A payment gateway is not necessarily a regulated cross-border aggregator; see PA-CB. For a platform example, read EDF when you get paid through Stripe.