Agent Payments Protocol (AP2) and the Race to Build Agent Infrastructure
And Why Ethereum Matters More Than Ever
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I wrote about ERC-8004 being a trust layer for AI agents. Within weeks on Sept 16, 2025, Google announced the Agent Payments Protocol (AP2) with 60+ partners including Mastercard, PayPal, American Express, and Coinbase. The infrastructure for the agent economy is being built in real-time.
The stakes are massive. The LLM API market hit $8.4 billion in 2025, with Anthropic alone targeting $9B in ARR by year-end, up from just $1 billion at the end of 2024. It’s worth noting that this is still almost entirely human-to-API commerce. Humans clicking buttons, humans entering credit cards, humans managing subscriptions. The real explosion happens when agents start transacting with each other autonomously.
How Many Partners?!
While ERC-8004 emerged from the Ethereum community as a grassroots effort, AP2 is unmistakably a Big Tech initiative. The partner list reads like a who's who of global finance and technology. Payment giants like Mastercard, PayPal, American Express, JCB, and UnionPay have all signed on. Tech companies including Salesforce, ServiceNow, Adobe, and Dell are building on the protocol. Crypto-native businesses such as Coinbase, MetaMask, Mysten Labs, and Eigen Labs providing the blockchain infrastructure. And finally, global payment processors like Adyen, Worldpay, and Checkout.com round out the ecosystem.
This announcement is backed by extensive documentation and a production-ready GitHub repository.
Verifiable Human Request: The Mandate System
Where ERC-8004 uses on-chain registries (identity, validation, reputation), AP2 takes a different approach with Mandates - cryptographically signed digital contracts that serve as tamper-proof evidence of user authorization.
The protocol handles two distinct user journeys through its mandate system:
Human Present: Real-time Shopping
When actively shopping, users create a chain of verifiable evidence:
Intent Mandate (optional): Captures initial shopping request
Example: "Find me white running shoes under $150"
Cart Mandate: The foundational credential containing:
Exact SKUs and prices (signed by merchant first)
Payment method (tokenized representation)
Shipping details and transaction amount
User's cryptographic signature via device authentication
Example: "Buy Nike Air Max 90 for $120 from FootLocker, ship to my home"
This ensures users see exactly what they're buying before payment. The merchant signs first (guaranteeing fulfillment), then the user signs (authorizing payment) - creating an unchangeable bilateral contract.
Human Not Present: Delegated Authority
For autonomous purchases, users sign detailed Intent Mandates upfront containing:
Natural language description of intent
Purchase parameters (budget, timing, criteria)
Authorized payment methods
Time-to-live for mandate validity
Example: "Buy 2 Taylor Swift tickets when available, max $500 each, closest to stage, Vegas show in July"
The agent can then autonomously execute when conditions are met. But here's the safety valve: merchants can force user confirmation if the intent is ambiguous. The merchant might respond: "I have 3 seating options matching your criteria - please choose." This brings the user back to sign a Cart Mandate, ensuring clarity.
The Payment Layer
Separately, a Payment Mandate provides the payment ecosystem visibility into:
AI agent presence signals
Transaction modality (Human Present vs Not Present)
Risk information for fraud prevention
This three-credential system (Intent/Cart/Payment) creates a complete audit trail answering the critical questions of authorization (signed mandates prove user consent), authenticity (cryptographic signatures prevent tampering), and accountability (clear evidence chain for dispute resolution).
The design is pragmatic - keeping heavy computation off-chain while using cryptography for what it does best: creating immutable, verifiable records. AP2 explicitly builds on both the A2A protocol for agent communication and Model Context Protocol (MCP) for tool integration, creating a modular stack where each layer solves a specific problem.
Merchants retain control throughout. They can require real-time confirmation for high-value transactions, reject ambiguous intents, or implement their own risk thresholds. This balances autonomous convenience with necessary safeguards against runaway agent spending.
Enter x402: The Ethereum Bridge
The most fascinating development is x402, the open payment protocol developed by Coinbase that enables instant, automatic stablecoin payments directly over HTTP. As one of the first extensions to AP2, x402 enables agents to actually pay each other.
The implications are profound. A research agent paying 0.1 cents per document crawl becomes trivial with stablecoins on Ethereum. Settlement happens instantly with no T+2 delays, no chargebacks, no intermediary risk. When an agent in Tokyo pays an agent in São Paulo, the payment is final in seconds. Smart contracts can escrow payments, release funds based on oracle validation, or implement complex payment splits, all without human intervention. Perhaps most importantly, it's global by default. How and if regulation will catch up here remains to be seen, but the protocol on its own can be decentralized end-to-end.
The Lowe's Demo: Seeing is Believing
Coinbase and Google built a proof-of-concept with Lowe's Labs that shows how x402 enables agent-to-agent commerce in under a minute. The demo showcases a complete purchasing flow with a demo Lowe's merchant agent.
The user asks about refrigerator options. The agent presents available models with specifications. When the user states their $1,000 budget, the agent recommends the Hisense model at $749. The user confirms, and payment executes via blockchain in real-time.
The entire transaction completes in minutes. Behind the scenes, the agents use the A2A protocol for communication and x402 for the payment rail. When payment is needed, the merchant agent includes all necessary transaction details, the user's agent signs the authorization, and the $749 USDC payment lands on-chain instantly.
No credit card forms. No account creation. No checkout process. Just natural conversation resulting in a completed blockchain transaction. This is what commerce looks like when agents handle both the negotiation and the payment.
Why Both Protocols Matter
ERC-8004 and AP2 aren't competing - they're complementary layers of the same stack.
ERC-8004 provides the trust infrastructure. It answers who this agent is through its Identity Registry, whether they did the work through its Validation Registry, and whether you can trust them through its Reputation Registry.
AP2 handles the actual transactions. It captures what the user wants through Intent Mandates, what they're buying through Cart Mandates, and how they pay through payment protocols including x402.
You could absolutely use both together. An agent discovers a service provider through ERC-8004's reputation system, then executes payment through AP2. The protocols solve different problems at different layers.
The Ethereum Advantage
ERC-8004 is native to Ethereum, using on-chain registries. The x402 extension to AP2 is built for Ethereum-compatible chains. Both assume stablecoins, primarily USDC, on Ethereum as the settlement layer.
Why Ethereum? As Marco De Rossi explains, Ethereum has the liquidity with USDC's $50B+ in circulation. It has the infrastructure with established wallets, DEXs, and bridges. It has the developer ecosystem where every major company already has Ethereum integration. Most importantly, it has the trust earned through 7+ years of uninterrupted operation.
What Happens Next
The implications of AP2 and ERC-8004 go far beyond simple payment processing. While agentic shopping reduces friction, this isn't about tricking users into buying more. Users still need convincing, still have budgets, still make deliberate choices. What changes is the removal of logistical barriers to purchases they were already going to make. The revolution is in the "how," not the "whether."
VentureBeat reports that enterprises are already exploring AP2 for procurement and B2B marketplaces. But they're thinking too small. The real transformation happens when agents develop their own economy, with their own products, services, and value creation invisible to humans.
AEO (Agent Engine Optimization) becomes a thing: The $600 billion digital advertising industry faces an existential crisis. When agents become primary purchasers, they don't see ads, they don't click sponsored links, and they don't impulse buy. SEO becomes irrelevant; AEO takes over. Businesses will need to make their products agent-legible through structured data, comprehensive APIs, and machine-readable catalogs. That 20-minute YouTube review influencing millions of human purchases? Worthless to agents unless creators start attaching structured metadata: "battery life discussed at 3:42: 14 hours." Product placement evolves from subtle psychology to explicit agent-readable signals.
Time-arbitrage for the masses: Users won't delegate everything immediately, but certain categories are obvious wins. Replenishment purchases go first - "order dog food when we're down to 5 pounds" removes the mental load of tracking supplies. Time-sensitive grabs like concert tickets or limited drops follow, because humans sleep but agents don't. Think CamelCamelCamel but for everything. Where CamelCamelCamel made price-waiting accessible to the masses, agents make all forms of patient commerce possible. Research-heavy purchases where agents can aggregate reviews and compare specifications become trivial.
But the real revolution happens in the hidden layer: agents transacting with each other for micro-services. Your agent needs SEC filing data? It pays a specialized agent $0.50. That agent pays another $0.10 for compute, another $0.05 for verification. Entire value chains emerge, invisible to humans, enabled by x402's micropayment capabilities.
Disintermediating the disintermediators: Traditional aggregators lose their moat when agents can query every merchant directly. Why pay Amazon's 15% fee when your agent can buy straight from manufacturers? Yet this assumes merchants want equal discovery by all agents. More likely, we'll see "agent cartels" - exclusive networks where premium agents aggregate demand for better prices. The openness of these protocols doesn't prevent commercial exclusivity layers on top. Amazon didn't become dominant through better search; it became dominant through logistics and trust. Those moats don't disappear just because agents can compare prices.
The discovery problem: Neither protocol addresses how your agent finds new merchants or how merchants announce products to agents. We need agent-focused discovery protocols - think RSS feeds for product catalogs, or agent-crawlable marketplaces. There's also no standard for negotiation. Current mandates are binary - accept or reject. But imagine agents haggling, bundling purchases across merchants, or negotiating complex multi-party deals in milliseconds. The first company to solve agent discovery might become the Amazon/Google/Netflix of the agent economy.
Made-for-agents products emerge: Perhaps most intriguingly, we'll see market structures that have never existed before. Products designed specifically for agent consumption, never intended for human users. API calls packaged as products. Data streams sold by the millisecond. Computational resources traded like commodities. Supply chains that operate completely autonomously, optimizing themselves without human oversight. Economic loops where no human ever sees the transaction. The protocols being built today are just the payment rails for an agents-only economy that we can barely imagine.
Ethereum is positioned to be the foundation for all of these innovations. As binji noted on X: "You'd want a ledger that no one could quietly change behind your back. You'd want neutral ground. You'd want Ethereum."
ERC-8004 gives us the trust layer - knowing who to work with.
AP2 gives us the payment layer - actually settling the transaction.
Ethereum provides the foundation - trustless, global, programmable money.
The agent economy doesn't need our permission to emerge. It just needs the protocols. And as of this week, it has them.