What is a payment gateway?
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Short answer
RBI defines a payment gateway (PG) as an entity providing technology infrastructure to route and process a payment without handling funds.1 A payment aggregator, by contrast, collects customers' payments and settles the funds to merchants.1 A PG is outside the scope of RBI's Payment Aggregator Master Direction.1 Non-bank payment aggregators need RBI authorisation.1
| Full form | Governed by | Who needs it | Where it is used | Related terms |
|---|---|---|---|---|
| Payment gateway (PG) | Outside RBI's Payment Aggregator Master Direction, 2025, under paragraph 10(g)1 | Exporters and businesses taking card or online payments | Checkout pages that carry a client's card or online payment to banks and networks1 | Payment aggregator, PA-CB, chargeback, card payment |
In everyday use, "payment gateway" means the checkout page where a client types in card details. Many Indian companies sell their whole collection product under that name. RBI uses the term more narrowly, and the difference decides which rules apply to the company holding your money.1
What does a payment gateway mean in simple words?
A payment gateway is the technology that carries a client's card or online payment to the banks and networks that process it. RBI's Master Direction on Regulation of Payment Aggregator (15 September 2025) defines a PG as an entity providing "technology infrastructure to route and facilitate processing of a payment transaction without any involvement in handling of funds".1
- Key words: "without any involvement in handling of funds".1
- Everyday use: the checkout page a client sees.
For example, the card form on a design studio's invoice page is the gateway part of the payment.
Why does a payment gateway matter for Indian exporters and freelancers?
A payment gateway matters because the label hides who actually holds your money, and that entity's rules protect you.1
- Bank compliance: a card payment from a foreign client for your services is an export receipt, and the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 still require an Export Declaration Form and realisation within nine months, or twelve months if invoiced or settled in rupees.3
- Safeguarding: a non-bank aggregator holding funds must be authorised.1
- Cross-border limits: a PA-CB keeps inward collections in an Inward Collection Account with an AD Category-I bank and caps each transaction at ₹25 lakh.1
Choose a provider that can give your bank the records it needs.3
How does a payment gateway work?
A payment gateway works as the routing layer: it passes the payment details on for processing, while an aggregator or bank handles the money.1 A business that also collects the money and settles it to you is acting as a payment aggregator.1
There is one more case. RBI says a card transaction where the card network handles the foreign exchange settlement and the aggregator receives the payment in local currency is not PA-CB activity.1
How do you check a payment gateway provider?
You check a provider by finding out which entity holds the money and looking that entity up on RBI's list.2
- Funds: who holds the money between the client's payment and your payout?
- Status: is that entity a bank, or on RBI's authorised list, and in which category?2
- Documents: what document will you get for each receipt, and with which purpose code?
- Settlement: how long does settlement take, and is that written in the agreement?1
End-to-end card collection, with fees and chargebacks, is covered in accepting international card payments in India.
What is the difference between a payment gateway and a payment aggregator?
A payment gateway routes the transaction without handling funds, while a payment aggregator collects payments and settles funds to merchants.1
| Entity | Role | Handles funds | RBI authorisation | Best for |
|---|---|---|---|---|
| Payment gateway | Routes and processes the transaction | No | Outside the Master Direction | The technology layer of a checkout |
| Payment aggregator | Collects payments and settles funds to merchants | Yes | Required for non-banks | Merchants who want collection and payout in one service |
| PA-CB | Aggregator for cross-border payments | Yes | Required for non-banks | Exporters collecting from foreign clients |
The table summarises paragraphs 4, 5 and 10 of the Master Direction.1 See what is a PA-CB.
What do people get wrong about a payment gateway?
People often assume the company they call a payment gateway is unregulated. If it collects and settles funds, it is acting as a payment aggregator under RBI's rules.1
- Product names: the rules follow what the company does.1
- Export duties: card receipts are still export receipts under the 2026 Regulations.3
Which terms are related to a payment gateway?
These terms describe the entities and risks around card and online collections:
- PA-CB: the cross-border payment aggregator category.1
- Chargeback: a card payment reversed at the cardholder's request.
- GST on payment gateway charges: how GST applies to provider fees.
- Payment gateways for international payments: how providers compare for exporters.
- Inward remittance: the export receipt the provider settles to you.
How did we verify this?
We checked this page against the sources below on 30 October 2026. Read our methodology or report an error.
- [1]RBI: Master Direction on Regulation of Payment Aggregator, CO.DPSS.POLC.No.S-633/02-14-008/2025-26 dated 15 September 2025 (paragraphs 4, 5, 10 and 11, Annexure 1)
- [2]RBI: Certificates of Authorisation issued under the Payment and Settlement Systems Act, 2007, Payment Aggregators section (checked 28 October 2026)
- [3]RBI: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, amended up to 22 September 2026
Frequently asked questions
Does a payment gateway need an RBI licence?+
Paragraph 10(g) of RBI's Master Direction on Regulation of Payment Aggregator says a payment gateway does not fall within its scope, so the Direction's authorisation requirement does not apply to it. RBI encourages payment gateways to adopt its baseline technology recommendations for payment systems.1
Many companies call their product a payment gateway. Which rules apply to them?+
The rules follow what the company does, not its product name. If a company sold as a payment gateway also collects and settles funds, it acts as a payment aggregator and needs RBI authorisation unless it is a bank. RBI's published list shows each authorised entity's category.12
Can a foreign client pay my invoice by card through a payment gateway?+
Yes, a foreign client can pay by card through a provider that accepts international cards, using its payment gateway checkout. Ask the provider who holds the money, how it settles to you, and what export documentation and purpose code it gives you for each receipt.1
Is a card payment where the network handles foreign exchange a PA-CB transaction?+
No. RBI says a card transaction where the card network handles the foreign exchange settlement and the aggregator receives the payment in local currency is not PA-CB activity. In that case the aggregator settles rupees to you, and the foreign exchange leg happens inside the card network.1
What should a freelancer ask before using a payment gateway for foreign clients?+
A freelancer should ask who holds the money between payment and payout, whether that entity is a bank or on RBI's authorised list and in which category, what document comes with each receipt, and whether settlement timelines are written into the agreement, as RBI requires for aggregators.12
This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.
Keep reading
How can an Indian business accept international card payments?
How Indian exporters accept Visa, Mastercard and Amex cards from foreign clients: RBI PA-CB rules, published card fees by provider, eligibility, settlement and FIRA.
GlossaryWhat is a Payment Aggregator, Cross Border (PA-CB)?
A PA-CB is an RBI-authorised payment aggregator that collects cross-border payments for merchants, including exporters. Definition, the ₹25 lakh cap and what to check.
CompareWhat are the best payment gateways for international payments in India?
Payment gateways for foreign card and link payments to Indian businesses, ordered by estimated cost on published fees, with RBI status, conversion, settlement and FIRC.
GlossaryWhat is a chargeback?
A chargeback is the reversal of a card payment by the cardholder's bank after a dispute. What it means for Indian freelancers and agencies paid by card.
GSTDo exporters pay GST on payment gateway charges?
Why Indian exporters pay GST on payment gateway fees even when the sale is a zero-rated export, how to claim the credit, and reverse charge on foreign platform fees.