x402
x402 is an open payment protocol, launched by Coinbase in May 2025, that uses the HTTP 402 "Payment Required" status code so that a server can request payment inside an ordinary web request and a client — often an AI agent — can pay it, usually in stablecoins, with no account, subscription or API key. A facilitator settles the payment.
- Also known as
- x402 protocol, x402 standard, HTTP 402 payments
- Introduced
- 6 May 2025 by Coinbase; in September 2025 Coinbase and Cloudflare announced the x402 Foundation to steward the standard, and the code now sits under the foundation; Google's Agent Payments Protocol (AP2), announced the same month, added an x402 extension for crypto payments between agents
- Built on
- the HTTP 402 status code, which the HTTP standard (RFC 9110) still describes as "reserved for future use"
- Typical payment
- a stablecoin such as USDC on a low-fee blockchain; for EVM tokens the recommended method is a signed EIP-3009 transfer authorisation, so the facilitator pays the network fee and the client only signs
- Typical use
- pay-per-call APIs and data feeds, paid tools offered to AI agents through MCP servers, paid access for crawlers, and other payments too small for cards
- Design rule
- payment schemes must not let the facilitator or the server move funds beyond what the client authorised
- Parties
- the client (a person, script or agent) with a wallet, the resource server, the facilitator, the blockchain, and the stablecoin issuer
How x402 works in practice
An agent calls a data API. The server answers 402 with a PAYMENT-REQUIRED header listing what it accepts: amount, token, network and the address to pay. The agent's wallet signs a payment payload for one of the options and repeats the request with a PAYMENT-SIGNATURE header. The server sends the payload to a facilitator to verify, does the work, has the facilitator settle on-chain, and returns the data with a PAYMENT-RESPONSE header confirming the transfer. There is no checkout page, no card number and no account.
The appeal is economic. Card payments carry fixed per-transaction costs that make a one-cent API call unviable; on a low-fee chain the network fee is a small fraction of a card's fixed charge, the facilitator can absorb it, and the seller is paid in seconds with no chargeback. The limits are practical. The payer needs a funded wallet and a policy on what an agent may spend. The payment is final, so refunds, disputes and errors become the seller's contract problem, not a card scheme's. Obligations such as sanctions screening, and licensing for anyone who holds or exchanges customers' money, fall on the wallets, facilitators and exchanges around the protocol rather than on the protocol itself. Cloudflare has proposed a deferred scheme for batched settlement, including over card and bank rails, which shows where the standard may go.
For an investor, x402 is plumbing in the agent-payments stack; the businesses to value are the facilitators, wallets and paid-API platforms that carry the volume.
Example
A market-data start-up sells company fundamentals by API. Under card billing its smallest plan is $49 a month, because card fees of around 30 cents plus a percentage make small charges uneconomic, and 70% of trial users never convert. It adds an x402 endpoint priced at $0.05 per call, settled in USDC. In the first quarter 1,800 agents and scripts pay without registering, for 1.7 million calls: $85,000 of revenue, against network and facilitator costs of about $2,600. The largest payer, an AI research agent, spends $3,400 without ever creating an account. The finance team now reconciles on-chain receipts daily, converts the stablecoin balance to dollars weekly, and screens paying wallets through a blockchain-analytics provider.
Common mistakes
- Giving an agent a wallet without spending limits or an allow-list of sellers. - Assuming the protocol removes compliance duties for whoever holds, converts or screens the funds. - Charging per call with no way to refund failed or duplicated requests. - Depending on a single facilitator, network or stablecoin issuer. - Treating x402 as a payment scheme; it has no chargeback, dispute process or consumer protection of its own.