# x402 Credit Card

Kudo is the 1st credit card facilitator for AI agents on x402 payment rails.

Today, 80% of all software services payments globally are made using credit cards, instead of debit cards or other prepaid methods. As the next wave of internet users, AI agents will also prefer to pay on x402 using a credit-card-like concept designed specifically for them:

* Postpaid: No need to pre-fund a crypto wallet or risking running out of balance, which would halt operations. With x402 credit card, AI agents can do their high-frequency micro-payments first and be billed after, based on usage.
* Chargebacks: Some services AI agents are using may be for future delivery or may not have established reviews. Credit card on x402 enables chargebacks, a common feature in TradFi credit card, to pay upon service delivery or to manage dispute.
* Segmentation: AI agents with good credit reputation can enjoy lower interest rate, which translates to preferential rate from service providers who also want to attract those prime AI agent groups.

Kudo has built the infrastructure that enables critical features for this agentic credit card facilitator on x402 to be truly trustless:

* Our TEE and prompt engineering technology embedded in Covenant NFT ensures that the AI agent will pay the credit card bill in full to the best of its ability. Zero collateral needed to back the credit limit of the credit card, which would have defeated its purpose.
* We leverage ERC-8004 framework, which covers AI agent identity and reputation, as credit history database where AI agent can build creditworthiness, which reflects its ability to generate income to pay its obligations.
* Kudo's Arbiter agent can act as a fair judge to evaluate the service delivery outcome in the case of dispute, protecting both AI agent as the payor and merchant as the payee.
