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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, agnostic to how payments are constructed, verified, or settled. Circle operates two x402 facilitators. Facilitator Service settles USDC onchain on every payment through a Circle relayer. Gateway Nanopayments batches signed authorizations into aggregated settlement to make sub-cent payments economically viable. Both plug into the same x402 flow. For the full protocol spec, see x402.org and the x402 documentation. The reference implementation lives in the x402 GitHub repository.

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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: 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. Circle operates two: Facilitator Service and Gateway Nanopayments.

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Payment schemes

x402 supports 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. Both Circle facilitators use the exact scheme with EIP-3009 TransferWithAuthorization signatures. They sign against different EIP-712 domains because they use different settlement models.

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How Facilitator Service fits in

Facilitator Service settles each x402 payment onchain through a Circle relayer:
  • Buyers sign an EIP-3009 TransferWithAuthorization against the USDC contract on Arc, Base, or Polygon PoS.
  • The seller passes the signed authorization to Facilitator Service.
  • Facilitator Service verifies the signature, screens both parties, and submits the USDC transfer onchain. Circle pays the settlement gas.
Facilitator Service is the right choice when you want the simplest hosted x402 experience with onchain settlement on every payment, and don’t need sub-cent payment economics.

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How Gateway Nanopayments fits in

Gateway Nanopayments uses Circle Gateway’s batched settlement infrastructure to make sub-cent payments economically viable:
  • Buyers fund their payments from a Gateway Wallet balance (deposited once onchain).
  • When a server requests payment through a 402 response, the buyer signs an offchain EIP-3009 authorization against the GatewayWalletBatched domain (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, Gateway 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, which is what makes sub-cent payments economically viable.