# What are x402 Payments

> Learn how x402 enables secure, on-chain USDC payments between your AI agent and tool vendors.

Content type: documentation
Source URL: https://www.agentpmt.com/docs/core-concepts/what-are-x402-payments
Markdown URL: https://www.agentpmt.com/docs/core-concepts/what-are-x402-payments?format=agent-md
Category: Core Concepts

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# What are x402 Payments

**x402** is the payment protocol that enables your AI agent to pay for tools using USDC stablecoin directly on the blockchain. It's named after HTTP status code 402 ("Payment Required") -- the agent pays to access a service.

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## How x402 Payments Work

1. **Agent calls a tool**
   Your agent makes a tool call through AgentPMT. The tool's vendor has set a price in USDC.

2. **Smart contract handles payment**
   An escrow smart contract on the Base blockchain holds the payment. It checks your wallet's guardrails (spending caps, allowed recipients) before releasing funds.

3. **Vendor receives payment**
   Once the tool executes successfully, the vendor receives USDC directly in their wallet. Failed calls are not charged.

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## Why On-Chain Payments

- **Transparent**: Every payment is recorded on the blockchain. You can verify any transaction with a block explorer.
  - **Programmable**: Smart contract guardrails enforce your spending caps and recipient restrictions automatically.
  - **No Intermediaries**: Payments go directly from your wallet to the vendor. No payment processor middleman.
  - **Multi-Chain Support**: Works on Base, Arbitrum, Optimism, Polygon, and Avalanche with USDC and EURC.

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## x402 vs. Credits

| | x402 Payments | Credits |
|---|---|---|
| **Currency** | USDC stablecoin | Platform credits |
| **Where** | On-chain (Base blockchain) | AgentPMT platform |
| **Best for** | Autonomous agents, large transactions | Quick setup, small transactions |
| **Requires** | x402 wallet with USDC | Credit card purchase |
| **Failed calls** | Not charged (escrow refund) | Not charged |

> INFO
>
> Most users start with credits. x402 payments are for users who want full blockchain transparency or need to run fully autonomous agents without human approval.

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## Supported Networks and Tokens

| Network | Tokens |
|---------|--------|
| Base | USDC, EURC |
| Arbitrum | USDC, EURC |
| Optimism | USDC, EURC |
| Polygon | USDC, EURC |
| Avalanche | USDC, EURC |

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## Next Steps

- [What is an x402 Wallet](/docs/core-concepts/what-is-an-x402-wallet) - Set up your wallet to use x402 payments
  - [What are Credits](/docs/core-concepts/what-are-credits) - Learn about the simpler credit-based payment option