x402 & agentic paymentsglossary

x402 is an open protocol for charging for an HTTP request with a stablecoin payment. The server answers an unpaid request with HTTP 402 and a signed challenge that quotes a price; the caller pays in USDC and retries, and the request succeeds.

HTTP 402 is a status code reserved for “Payment Required.” It went unused for decades; x402 gives it a concrete meaning — a 402 response carries a signed challenge with the price and how to pay, so the caller can pay and retry.

A 402 challenge is the signed JSON a server returns with an HTTP 402 response. It states the price, the accepted payment details, and a one-time nonce, so the caller knows exactly what to pay and how to prove it on retry.

A nonce is a one-time value included in a 402 challenge. It binds a payment to a single request so the same proof can’t be replayed to unlock access twice. The caller echoes it back when retrying with payment.

USDC is a US-dollar stablecoin. In x402, prices are quoted and paid in USDC, so a “$0.01 per call” price means one cent of USDC — predictable, dollar-denominated amounts that suit tiny per-request payments.

Base is a low-fee Ethereum Layer 2 network. x402 payments in Paywall are priced and paid in USDC on Base, which keeps per-call fees small enough for micropayments while remaining widely supported by wallets and agent runtimes.

A micropayment is a very small payment — often a fraction of a cent to a few cents. Pay-per-call API pricing is a micropayment use case: each request is charged individually rather than bundled into a monthly invoice.

Pay-per-call means charging for each individual API request instead of a subscription or quota. The caller pays the quoted price for a call and gets the result; there’s no plan to manage and no “calls left this month.”

The agentic web is the emerging pattern where autonomous AI agents — not just people in browsers — read, call, and transact across the web on a user’s behalf. It creates demand for machine-native payments like x402.

An AI agent is a program that pursues a goal by taking actions — calling tools and APIs, reading results, and deciding what to do next — with little or no human steering. To use paid resources, an agent needs a way to pay programmatically.

MCP is a protocol for exposing tools and data to AI models in a standard way. An MCP server offers tools an agent can call; pairing MCP with x402 lets an MCP server charge per tool call in USDC.

Test mode runs the full x402 flow — challenge, pay, verify, allow — without spending real USDC. Sandbox keys simulate payments so you can build and CI-test an integration, then flip one environment variable to go live.

Fail-closed means that when something goes wrong — a payment can’t be verified or the platform is unreachable — access is denied rather than granted. Paywall’s SDKs return 502 instead of ever serving paid content for free.

The X402v1 wire contract is the frozen byte-level format of an x402 challenge and payment proof. “Frozen” means it doesn’t change, so every official SDK signs and verifies identically — behaviour can’t drift between languages.