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x402 is an open, neutral standard for internet-native payments built on the HTTP 402 Payment Required status code. It defines how a server communicates that payment is required to access a resource, and how a client can provide proof of payment. x402 is not a payment system itself—it is a negotiation protocol that is agnostic to how payments are constructed, verified, or settled. This document explains the x402 protocol, its core concepts, and how Nanopayments provides a gasless payment method that works with x402.

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The problem with internet payments

Traditional payment systems were not designed for programmatic, high-frequency transactions. Credit cards carry high fixed fees, require account creation, and involve slow settlement. Standard onchain payments require gas for every transaction, making sub-cent payments uneconomical. Neither approach works well for AI agents, per-request billing, or machine-to-machine commerce. x402 addresses this by making payment negotiation a native part of HTTP. A server declares that payment is required, a client provides a payment payload, and the exchange happens in a single request-response cycle. The actual payment method is flexible—any scheme that can produce a verifiable payment payload can work with x402.

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How x402 works

The x402 protocol uses three HTTP headers to negotiate payment between a client and a server:
HeaderDirectionPurpose
PAYMENT-REQUIREDServer to clientPayment requirements (accepted schemes, price, network, destination)
PAYMENT-SIGNATUREClient to serverSigned payment payload proving the client has authorized payment
PAYMENT-RESPONSEServer to clientConfirmation that the payment was verified, returned with the resource
The typical flow is:
  1. The client requests a paid resource.
  2. The server responds with 402 Payment Required, including payment details such as the accepted payment schemes, price, network, and destination address.
  3. The client selects a payment option, constructs and signs a payment payload, and retries the request with the PAYMENT-SIGNATURE header.
  4. The server verifies the payment (directly or through a facilitator) and returns the resource along with a confirmation in the PAYMENT-RESPONSE header.
x402 defines this negotiation flow. How the payment payload is constructed, how it is verified, and how funds ultimately move are determined by the payment method and facilitator, not by x402 itself.

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Core concepts

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Buyers and sellers

  • Buyer (client): The entity requesting a paid resource. This can be a human-operated application, an AI agent, or any programmatic HTTP client. Buyers construct payment payloads using whatever payment method the server accepts.
  • Seller (server): The resource provider that requires payment. Sellers declare their accepted payment methods in the 402 response, verify incoming payment payloads, and serve the resource when payment is valid. Any HTTP-accessible API or service can act as a seller.

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Facilitators

A facilitator is an optional service that handles payment verification and settlement on behalf of sellers. By using a facilitator, sellers avoid needing to verify payment payloads or interact with blockchain infrastructure themselves. Different facilitators can support different payment methods. A seller connects to a facilitator and automatically gains access to the payment methods that facilitator supports.

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Payment schemes

x402 is designed to support multiple payment schemes. A payment scheme defines how payment payloads are constructed, signed, and verified. The 402 response from a server lists the schemes it accepts, and the client picks one it can fulfill. Nanopayments uses the exact scheme with a custom EIP-3009 TransferWithAuthorization signature against the GatewayWalletBatched domain, enabling gasless payments from the buyer’s Gateway balance.

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How Nanopayments fits in

x402 defines the negotiation—a server says “pay me” and a client responds with a payment payload. But x402 does not prescribe how those payments are funded, verified, or settled. That is where Nanopayments comes in. Nanopayments is a payment method for x402 that uses Circle Gateway’s batched settlement infrastructure:
  • Buyers fund their payments from a Gateway Wallet balance (deposited once onchain).
  • When a server requests payment via 402, the buyer signs an offchain EIP-3009 authorization (zero gas) and includes it in the PAYMENT-SIGNATURE header.
  • The server (or its facilitator) submits the authorization to Gateway for verification and settlement.
  • Gateway collects authorizations and settles net positions in bulk onchain, paying gas once per batch instead of once per payment.
From x402’s perspective, Nanopayments is just another payment method. Clients and servers use the same 402 negotiation flow—the difference is that the underlying payment is gasless and settled through batching.

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