Cloudflare NET and Coinbase COIN have teamed up to launch the x402 Foundation, with the aim of creating an open Internet standard for digital payments.
The x402 standard to be launched with Coinbase will enable website owners, developers, and creators to send and receive payments across geographies, currencies, and payment methods seamlessly. Cloudflare is anticipating that this will help the world take a step toward Internet-native money.
More importantly, the new standard to be launched in collaboration with Coinbase is expected to pave the way toward a flexible future for monetizing APIs, content, and autonomous transactions. This new standard will add another offering to the portfolio of Cloudflare, which has already launched multiple products in 2025.
In 2025, NET introduced multiple products, including Cloudflare for AI, Cloudforce One threat events platform, Quantum-safe Zero Trust support, One-Click Content Credentials and connected AI Security Posture Management into its Zero Trust platform.
These new offerings have increased Cloudflare’s capabilities to include integrated solutions for Firewall for AI and AI Gateway, post-quantum cryptography, while making the Internet a safer place. However, Cloudflare suffers from a few challenges.
NET Faces Competitive Pressure and Shrinking Margins
One of the many reasons why Cloudflare is heavily investing in developing new products and features is due to competition. Cloudflare operates in a highly competitive environment. In its content delivery space, companies like Amazon AMZN, Akamai Technology and Fastly compete with Cloudflare. While in the cybersecurity space, a range of competitors like Palo Alto Networks and Zscaler ZS compete with it.
Amazon also competes with its developer platform through its general-purpose serverless and container-based edge deployment solutions. Alphabet is implementing AI in its Cloud Run solution, Amazon’s AWS Lambda & Lambda@Edge leverage deep integrations with AWS services, robust tooling, and a mature developer base.
Furthermore, Zscaler’s presence across multiple verticals, including SASE and zero trust, along with its rapid market expansion, puts Cloudflare under pressure of market expansion and product innovation. To survive in the highly competitive market, each player must continually invest in broadening its capabilities, leading to higher investment in research and development and sales and marketing, causing shrinking margins.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report Zscaler, Inc. (ZS): Free Stock Analysis Report Cloudflare, Inc. (NET): Free Stock Analysis Report Coinbase Global, Inc. (COIN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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