x402
Category
x402 is an open protocol for machine payments over HTTP, built on the 402 status code. It allows a client to pay for a resource programmatically and retry, without human involvement. It originated at Coinbase and is now governed under the Linux Foundation.
How it works
A server responds 402 with payment terms. The client constructs a payment, attaches proof to a retried request, and receives the resource. Settlement typically occurs on-chain in stablecoins, which means the payment clears in seconds and the receiving party holds a settlement record rather than a processor statement.
Example
Northwind's 40,000 calls settle over x402 at $0.08 each. There is no invoice, no purchase order, and no monthly processor remittance report. What exists is 40,000 settlement records and a vendor relationship that produced $3,200 of expense.
Common questions
What does x402 settlement mean for the books?
Cash moves at the moment of consumption, which suits cash-basis reporting and complicates accrual reporting. The expense is incurred continuously, and there is no invoice to anchor the period it belongs to.
Is x402 the same as paying in crypto?
The protocol defines the payment exchange over HTTP. Settlement is typically in stablecoins today, but the mechanism is separable from any one settlement asset.