That would be progressive tense; we haven't learned that. The difference is between her not paying at this very moment, and that it does happen, but may not be happening at this very moment. As in, "she doesn't pay for lunch" (as in this happens, but not now), and "she isn't paying for lunch" (this action of not paying for lunch is happening now). I realize I'm not great at explaining, but nobody else replied yet. :/
@ichilingo are you a native speaker of English or Spanish? I agree with your distinctions, however the sentence "she doesn't pay" would almost never be heard in English unless there was a context or a longer sentence..."She doesn't pay for lunch because she gets a free lunch at work"...or something like that. It just sounds incredibly unnatural all by itself.
THE REAL QUESTION IS Would the sentence be used by a native Spanish speaker in the same way that a native English speaker would use "She isn't paying" (or it's equivalent "she's not paying".) For example, if you and I are at lunch in Mexico and we think our friend is going to pay for us, but we see she doesn't reach for her wallet- would you as my Spanish-speaking companion say to me "Ella no paga" or "Ella no esta pagando"? I have a hunch it would be "Ella no paga"- in which case "She's not paying" or "She isn't paying" would be the translation to the actual English usage.
This may be a little advanced. But, the Spanish present can be appropriately translated into the English present progressive. And in fact, Duo often does accept that translation. (perhaps that lesson is coming later.)
See these websites
http://elblogdelingles.blogspot.mx/2014/12/la-equivalencia-de-los-tiempos-verbales.html https://www.duolingo.com/skill/en/Verbs%3A-Gerund/practice https://www.thoughtco.com/introduction-to-the-indicative-present-tense-3079925
This last reference says the the Spanish does not use the present progressive (e.g., is saying, am asking) as much as does the English
Ella canta. "She is singing."
Él come. "He is eating."
Anda a la casa de su abuela. "He is walking to his grandmother's house."
Estoy en casa. "I am at home."
It's more like potato tomato. They are not the same thing.
The Spanish present tense only translates to English as past tense in certain limited cases, none of which apply here. Thus, you can translate this to the simple present, "She doesn't pay," present progressive "She isn't paying," or near future "She won't pay."
For the simple past, Spanish and English both would use the past tense. So, "She didn't pay" would have been Ella no pagó.