diff --git a/.changeset/eight-pants-drum.md b/.changeset/eight-pants-drum.md
new file mode 100644
index 00000000000..3744dd06674
--- /dev/null
+++ b/.changeset/eight-pants-drum.md
@@ -0,0 +1,5 @@
+---
+"thirdweb": patch
+---
+
+Support x402 v2
diff --git a/packages/thirdweb/src/x402/common.ts b/packages/thirdweb/src/x402/common.ts
index c15ba4873ee..5f05930dac8 100644
--- a/packages/thirdweb/src/x402/common.ts
+++ b/packages/thirdweb/src/x402/common.ts
@@ -51,7 +51,8 @@ export async function decodePaymentRequest(
   let decodedPayment: RequestedPaymentPayload;
   try {
     decodedPayment = decodePayment(paymentData);
-    decodedPayment.x402Version = x402Version;
+    // Preserve version provided by the client, default to the current protocol version if missing
+    decodedPayment.x402Version ??= x402Version;
   } catch (error) {
     return {
       status: 402,
diff --git a/packages/thirdweb/src/x402/fetchWithPayment.test.ts b/packages/thirdweb/src/x402/fetchWithPayment.test.ts
index 9207e6f264f..ff925da2ef1 100644
--- a/packages/thirdweb/src/x402/fetchWithPayment.test.ts
+++ b/packages/thirdweb/src/x402/fetchWithPayment.test.ts
@@ -1,6 +1,7 @@
 import { beforeEach, describe, expect, it, vi } from "vitest";
 import { safeBase64Decode, safeBase64Encode } from "./encode.js";
 import { wrapFetchWithPayment } from "./fetchWithPayment.js";
+import { getPaymentRequestHeader } from "./headers.js";
 
 // Mock the createPaymentHeader function
 vi.mock("./sign.js", () => ({
@@ -34,7 +35,7 @@ describe("wrapFetchWithPayment", () => {
   };
 
   const mock402ResponseData = {
-    x402Version: 1,
+    x402Version: 2,
     accepts: [mockPaymentRequirements],
     error: undefined,
   };
@@ -109,9 +110,11 @@ describe("wrapFetchWithPayment", () => {
     expect(response.status).toBe(200);
     expect(mockFetch).toHaveBeenCalledTimes(2);
 
-    // Verify the second call includes the X-PAYMENT header
+    // Verify the second call includes the payment header for the version
     const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
-    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+    expect(secondCallInit.headers).toHaveProperty(
+      getPaymentRequestHeader(mock402ResponseData.x402Version),
+    );
   });
 
   it("should parse payment requirements from JSON body when payment-required header is absent", async () => {
@@ -141,9 +144,11 @@ describe("wrapFetchWithPayment", () => {
     expect(response.status).toBe(200);
     expect(mockFetch).toHaveBeenCalledTimes(2);
 
-    // Verify the second call includes the X-PAYMENT header
+    // Verify the second call includes the payment header for the version
     const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
-    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+    expect(secondCallInit.headers).toHaveProperty(
+      getPaymentRequestHeader(mock402ResponseData.x402Version),
+    );
   });
 
   it("should prefer payment-required header over JSON body when both are present", async () => {
@@ -152,12 +157,12 @@ describe("wrapFetchWithPayment", () => {
       maxAmountRequired: "500000", // Different amount to verify header is used
     };
     const headerResponseData = {
-      x402Version: 1,
+      x402Version: 2,
       accepts: [headerPaymentRequirements],
     };
 
     const bodyResponseData = {
-      x402Version: 1,
+      x402Version: 2,
       accepts: [{ ...mockPaymentRequirements, maxAmountRequired: "2000000" }],
     };
 
@@ -237,9 +242,11 @@ describe("wrapFetchWithPayment", () => {
     expect(response.status).toBe(200);
     expect(mockFetch).toHaveBeenCalledTimes(2);
 
-    // Verify the second call includes the X-PAYMENT header
+    // Verify the second call includes the payment header for the version
     const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
-    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+    expect(secondCallInit.headers).toHaveProperty(
+      getPaymentRequestHeader(mock402ResponseData.x402Version),
+    );
   });
 
   it("should correctly decode a raw base64 encoded payment-required header", async () => {
@@ -297,8 +304,10 @@ describe("wrapFetchWithPayment", () => {
     expect(response.status).toBe(200);
     expect(mockFetch).toHaveBeenCalledTimes(2);
 
-    // Verify the retry request was made with X-PAYMENT header
+    // Verify the retry request was made with the v1 payment header
     const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
-    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+    expect(secondCallInit.headers).toHaveProperty(
+      getPaymentRequestHeader(parsed.x402Version),
+    );
   });
 });
diff --git a/packages/thirdweb/src/x402/fetchWithPayment.ts b/packages/thirdweb/src/x402/fetchWithPayment.ts
index 9100a12a61b..dd91fe6cbbb 100644
--- a/packages/thirdweb/src/x402/fetchWithPayment.ts
+++ b/packages/thirdweb/src/x402/fetchWithPayment.ts
@@ -5,6 +5,10 @@ import type { AsyncStorage } from "../utils/storage/AsyncStorage.js";
 import { webLocalStorage } from "../utils/storage/webStorage.js";
 import type { Wallet } from "../wallets/interfaces/wallet.js";
 import { safeBase64Decode } from "./encode.js";
+import {
+  getPaymentRequestHeader,
+  getPaymentResponseHeader,
+} from "./headers.js";
 import { clearPermitSignatureFromCache } from "./permitSignatureStorage.js";
 import {
   extractEvmChainId,
@@ -13,6 +17,7 @@ import {
   RequestedPaymentRequirementsSchema,
 } from "./schemas.js";
 import { createPaymentHeader } from "./sign.js";
+import { x402Version as defaultX402Version } from "./types.js";
 
 /**
  * Enables the payment of APIs using the x402 payment protocol.
@@ -96,7 +101,7 @@ export function wrapFetchWithPayment(
         );
       }
 
-      x402Version = parsed.x402Version;
+      x402Version = parsed.x402Version ?? defaultX402Version;
       parsedPaymentRequirements = parsed.accepts.map((x) =>
         RequestedPaymentRequirementsSchema.parse(x),
       );
@@ -114,7 +119,7 @@ export function wrapFetchWithPayment(
         );
       }
 
-      x402Version = body.x402Version;
+      x402Version = body.x402Version ?? defaultX402Version;
       parsedPaymentRequirements = body.accepts.map((x) =>
         RequestedPaymentRequirementsSchema.parse(x),
       );
@@ -180,6 +185,9 @@ export function wrapFetchWithPayment(
       options?.storage ?? webLocalStorage,
     );
 
+    const paymentRequestHeaderName = getPaymentRequestHeader(x402Version);
+    const paymentResponseHeaderName = getPaymentResponseHeader(x402Version);
+
     const initParams = init || {};
 
     if ((initParams as { __is402Retry?: boolean }).__is402Retry) {
@@ -190,8 +198,8 @@ export function wrapFetchWithPayment(
       ...initParams,
       headers: {
         ...(initParams.headers || {}),
-        "X-PAYMENT": paymentHeader,
-        "Access-Control-Expose-Headers": "X-PAYMENT-RESPONSE",
+        [paymentRequestHeaderName]: paymentHeader,
+        "Access-Control-Expose-Headers": paymentResponseHeaderName,
       },
       __is402Retry: true,
     };
diff --git a/packages/thirdweb/src/x402/headers.ts b/packages/thirdweb/src/x402/headers.ts
new file mode 100644
index 00000000000..47d29670a60
--- /dev/null
+++ b/packages/thirdweb/src/x402/headers.ts
@@ -0,0 +1,26 @@
+import { type X402Version, x402Version } from "./types.js";
+
+const PAYMENT_HEADER_V1 = "X-PAYMENT";
+const PAYMENT_HEADER_V2 = "PAYMENT-SIGNATURE";
+const PAYMENT_RESPONSE_HEADER_V1 = "X-PAYMENT-RESPONSE";
+const PAYMENT_RESPONSE_HEADER_V2 = "PAYMENT-RESPONSE";
+
+function resolveVersion(version?: number | X402Version): X402Version {
+  return version === 1 ? 1 : 2;
+}
+
+export function getPaymentRequestHeader(
+  version?: number | X402Version,
+): string {
+  const resolvedVersion = resolveVersion(version ?? x402Version);
+  return resolvedVersion === 1 ? PAYMENT_HEADER_V1 : PAYMENT_HEADER_V2;
+}
+
+export function getPaymentResponseHeader(
+  version?: number | X402Version,
+): string {
+  const resolvedVersion = resolveVersion(version ?? x402Version);
+  return resolvedVersion === 1
+    ? PAYMENT_RESPONSE_HEADER_V1
+    : PAYMENT_RESPONSE_HEADER_V2;
+}
diff --git a/packages/thirdweb/src/x402/schemas.ts b/packages/thirdweb/src/x402/schemas.ts
index 6531f02b5d6..15e3fd404ed 100644
--- a/packages/thirdweb/src/x402/schemas.ts
+++ b/packages/thirdweb/src/x402/schemas.ts
@@ -82,7 +82,7 @@ const FacilitatorSupportedResponseSchema =
   SupportedPaymentKindsResponseSchema.extend({
     kinds: z.array(
       z.object({
-        x402Version: z.literal(1),
+        x402Version: z.union([z.literal(1), z.literal(2)]),
         scheme: PaymentSchemeSchema,
         network: FacilitatorNetworkSchema,
         extra: z
diff --git a/packages/thirdweb/src/x402/settle-payment.ts b/packages/thirdweb/src/x402/settle-payment.ts
index 50cb2b61fa2..e028c04a5d7 100644
--- a/packages/thirdweb/src/x402/settle-payment.ts
+++ b/packages/thirdweb/src/x402/settle-payment.ts
@@ -1,6 +1,7 @@
 import { stringify } from "../utils/json.js";
 import { decodePaymentRequest } from "./common.js";
 import { safeBase64Encode } from "./encode.js";
+import { getPaymentResponseHeader } from "./headers.js";
 import {
   type SettlePaymentArgs,
   type SettlePaymentResult,
@@ -37,7 +38,9 @@ import {
  * });
  *
  * export async function GET(request: Request) {
- *   const paymentData = request.headers.get("x-payment");
+ *   const paymentData =
+ *     request.headers.get("payment-signature") ??
+ *     request.headers.get("x-payment");
  *
  *   // verify and process the payment
  *   const result = await settlePayment({
@@ -104,7 +107,8 @@ import {
  *   const result = await settlePayment({
  *     resourceUrl: `${req.protocol}://${req.get('host')}${req.originalUrl}`,
  *     method: req.method,
- *     paymentData: req.headers["x-payment"],
+ *     paymentData:
+ *       req.headers["payment-signature"] ?? req.headers["x-payment"],
  *     payTo: "0x1234567890123456789012345678901234567890",
  *     network: arbitrumSepolia, // or any other chain
  *     price: "$0.05",
@@ -151,6 +155,9 @@ export async function settlePayment(
     decodePaymentResult;
 
   try {
+    const paymentResponseHeaderName = getPaymentResponseHeader(
+      decodedPayment.x402Version,
+    );
     const settlement = await facilitator.settle(
       decodedPayment,
       selectedPaymentRequirements,
@@ -162,8 +169,8 @@ export async function settlePayment(
         status: 200,
         paymentReceipt: settlement,
         responseHeaders: {
-          "Access-Control-Expose-Headers": "X-PAYMENT-RESPONSE",
-          "X-PAYMENT-RESPONSE": safeBase64Encode(stringify(settlement)),
+          "Access-Control-Expose-Headers": paymentResponseHeaderName,
+          [paymentResponseHeaderName]: safeBase64Encode(stringify(settlement)),
         },
       };
     } else {
@@ -174,7 +181,7 @@ export async function settlePayment(
           "Content-Type": "application/json",
         },
         responseBody: {
-          x402Version,
+          x402Version: decodedPayment.x402Version ?? x402Version,
           error,
           errorMessage:
             errorMessages?.settlementFailed || settlement.errorMessage,
@@ -190,7 +197,7 @@ export async function settlePayment(
         "Content-Type": "application/json",
       },
       responseBody: {
-        x402Version,
+        x402Version: decodedPayment.x402Version ?? x402Version,
         error: "Settlement error",
         errorMessage:
           errorMessages?.settlementFailed ||
diff --git a/packages/thirdweb/src/x402/types.ts b/packages/thirdweb/src/x402/types.ts
index 54c3887f36d..26e647932f6 100644
--- a/packages/thirdweb/src/x402/types.ts
+++ b/packages/thirdweb/src/x402/types.ts
@@ -11,7 +11,9 @@ import type {
   SupportedSignatureTypeSchema,
 } from "./schemas.js";
 
-export const x402Version = 1;
+const supportedX402Versions = [1, 2] as const;
+export type X402Version = (typeof supportedX402Versions)[number];
+export const x402Version: X402Version = 2;
 
 /**
  * Configuration object for verifying or processing X402 payments.
@@ -23,7 +25,9 @@ export type PaymentArgs = {
   resourceUrl: string;
   /** The HTTP method used to access the resource */
   method: "GET" | "POST" | ({} & string);
-  /** The payment data/proof provided by the client, typically from the X-PAYMENT header */
+  /**
+   * The payment data/proof provided by the client, typically from the PAYMENT-SIGNATURE (v2) or X-PAYMENT (v1) header
+   */
   paymentData?: string | null;
   /** The blockchain network where the payment should be processed */
   network: FacilitatorNetwork | Chain;
diff --git a/packages/thirdweb/src/x402/verify-payment.ts b/packages/thirdweb/src/x402/verify-payment.ts
index 237e51bbd79..0ebf7436ab6 100644
--- a/packages/thirdweb/src/x402/verify-payment.ts
+++ b/packages/thirdweb/src/x402/verify-payment.ts
@@ -29,7 +29,9 @@ import {
  * });
  *
  * export async function GET(request: Request) {
- *   const paymentData = request.headers.get("x-payment");
+ *   const paymentData =
+ *     request.headers.get("payment-signature") ??
+ *     request.headers.get("x-payment");
  *
  *   const paymentArgs = {
  *     resourceUrl: "https://api.example.com/premium-content",
@@ -121,7 +123,7 @@ export async function verifyPayment(
           "Content-Type": "application/json",
         },
         responseBody: {
-          x402Version,
+          x402Version: decodedPayment.x402Version ?? x402Version,
           error: error,
           errorMessage:
             errorMessages?.verificationFailed || verification.errorMessage,
@@ -137,7 +139,7 @@ export async function verifyPayment(
         "Content-Type": "application/json",
       },
       responseBody: {
-        x402Version,
+        x402Version: decodedPayment.x402Version ?? x402Version,
         error: "Verification error",
         errorMessage:
           errorMessages?.verificationFailed ||