What is Agent Payments Protocol (AP2)?

AP2 solves the trust problem in machine-to-machine commerce: how does a merchant agent accept payment from a buyer agent without either party exposing financial credentials? The protocol implements a three-party model. The Buyer Agent holds a cryptographic spending key issued by its organization with embedded constraints (daily limits, vendor categories, approval thresholds). When a purchase is initiated, the Buyer Agent creates a Cart Mandate, a signed document containing the cart details, the maximum authorized spend, and a cryptographic proof of spending authority. The Merchant Agent validates this mandate against the buyer's public key, confirms the spending limits are sufficient, and submits the mandate to a Settlement Layer (which connects to traditional banking rails via Stripe, Adyen, or direct ACH). The Settlement Layer verifies the cryptographic chain, executes the charge, and returns a signed receipt to both parties. Critical to the design is the spending constraint model: organizations can issue keys with rules like "maximum $50K per transaction," "only hardware category purchases," or "requires human approval above $10K." This allows companies to delegate purchasing authority to AI agents with precise, enforceable guardrails.