When a web page can't be found, you see an error code like 404, "Not Found." The original web's designers also set aside a code for payments: 402, "Payment Required."
For decades it went almost entirely unused.
x402 puts that code to work. It's an open payment standard that lets an AI agent pay for a web service on the spot, usually in a dollar-pegged stablecoin, with no account, card or sign-up.
How it works. An agent asks a website for something: data, an article, a tool. The site answers with a 402 and a price.
The agent pays from its crypto wallet, and the site sends what it asked for. x402 is implemented on DeAI News via our tip jar, or if you connect to our MCP servers and use a wallet.
Because payments can be tiny, x402 works for things priced at a cent or less. That's hard to do with credit cards, whose fees eat small purchases.
Who built it. Erik Reppel invented x402 while he was head of engineering at Coinbase Developer Platform. He left Coinbase in May to start a company, but he still sits on the protocol's technical steering committee.
In April, Coinbase handed x402 to the Linux Foundation, which supports open-source software, betting it had a better shot at becoming the internet's payment layer as an open standard.
Who's joining. Block, the payments company led by Jack Dorsey, said in September it's adding bitcoin payments to x402 and joined the group that runs it. "Open agentic rails give Bitcoin a natural role in the everyday, high-volume, low-value payments the agentic economy will generate," Block said.
Blockchains including Cardano and NEAR have signed on too. As of August, about 99% of x402 payments settled in Circle's USDC.
The catch: almost nobody is getting paid yet. Developer and researcher Zaryab Afser estimated that the median x402 merchant earned about 6 cents over a month. That's not per call, he noted, but "six cents in total, for the entire month."
The median price in the x402 catalog is 1 cent. By Afser's math, a merchant needs 10,000 successful agent calls a month to earn $100.
The bigger bet may be discovery. Gabe Tramble, founder of crypto analysis firm Shoal Research, argues that x402 could work like early search engines, with agents browsing marketplaces of paid services. "The discovery and the conversion are the same event," he wrote.
Why it matters. If agents do more of our shopping and research, the way they pay decides who gets paid and who controls the checkout. x402 is a bet that it can be an open standard instead of a card network or a single company.
Read more: Coinbase's Reppel, inventor of x402 protocol, leaves to start company · Jack Dorsey's Block endorses AI-friendly x402 payments for Bitcoin · Median x402 merchant earns 6 cents a month, researcher estimates · When AI agents shop, they might find your app in an x402 store · Report details threats to USDC's early lead in agentic payments
HOW AI WAS USED IN THE PRODUCTION OF THIS PIECE: I drafted this explainer with Claude, which pulled the source stories from the DeAI News archive through the Distro Publisher MCP connector and applied the Distro house-style rules. I checked every quote and figure against the original stories.