Key Highlights
- Coinbase, Stripe, and Cloudflare joined the x402 Foundation to build a shared internet payment system.
- The x402 protocol lets apps and AI send money automatically, including very small payments, without human input.
- The project aims to make online payments open and simple, like how email and websites already work on the internet.
Coinbase, Stripe, and Cloudflare have joined the x402 Foundation to develop a shared standard for internet payments, aimed at enabling applications and AI systems to send and receive money directly online.
In an X post on Thursday, Coinbase stated that the initiative centers on the x402 protocol, which allows payments, including very small transactions, to be processed automatically during online interactions without requiring manual user input. It is designed to simplify digital payments and reduce reliance on traditional intermediaries.
How the x402 system works
According to the announcement, the system supports both regular money (fiat) and digital currencies, and it works across different blockchains and payment systems. The foundation will manage it as a neutral non-profit body, so no single company owns or controls the system.
The system is being developed as more and more AI tools are being used on the internet. These tools are basically software tools, also known as AI agents, which have the capability to perform tasks on behalf of the user. For instance, the AI agent might pay for the service while it’s in the middle of a task, without needing human approval each time.
In short, the x402 protocol is built for this type of activity. The team said it can handle very small payments, even less than one cent, and process them many times. Such small transactions are difficult to process using other payment systems, such as credit or debit cards.
Companies backing the project
The foundation includes companies from different sectors such as payments, cloud computing, and crypto.
Participants include Amazon Web Services, Google, Microsoft, Visa, Mastercard, Shopify, Circle, and the Solana Foundation. These companies are expected to collaborate on building a system that allows payments to move more easily across platforms and countries.
Broader context
The idea behind x402 comes from an old internet code called “402 Payment Required.” This code was created years ago as part of how the internet works, but it was never fully used. Coinbase launched x402 to bring this idea into real use, especially with blockchain and stablecoins.
So far, the protocol has processed about 97 million transactions on Coinbase’s Base blockchain, according to data from Artemis Analytics.
At the same time, other companies are building similar systems. Stripe and Paradigm are working on another system called Machine Payments Protocol.
Today, most online payments go through several middle steps, like banks and card networks, which can slow down transactions and add costs. The x402 Foundation aims to reduce these steps and make sending money online as simple as sending a message.
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