diff --git a/src/background/services/background.ts b/src/background/services/background.ts
index a67cafd9..41ee1cc9 100644
--- a/src/background/services/background.ts
+++ b/src/background/services/background.ts
@@ -194,7 +194,7 @@ export class Background {
 
             case 'CONNECT_WALLET':
               await this.openPaymentsService.connectWallet(message.payload);
-              if (message.payload.recurring) {
+              if (message.payload?.recurring) {
                 this.scheduleResetOutOfFundsState();
               }
               return success(undefined);
diff --git a/src/background/services/keyAutoAdd.ts b/src/background/services/keyAutoAdd.ts
index b2725ac9..2a08df54 100644
--- a/src/background/services/keyAutoAdd.ts
+++ b/src/background/services/keyAutoAdd.ts
@@ -1,8 +1,10 @@
 import {
   ErrorWithKey,
   ensureEnd,
+  errorWithKeyToJSON,
   isErrorWithKey,
   withResolvers,
+  type ErrorWithKeyLike,
 } from '@/shared/helpers';
 import type { Browser, Runtime, Tabs } from 'webextension-polyfill';
 import type { WalletAddress } from '@interledger/open-payments';
@@ -49,7 +51,7 @@ export class KeyAutoAddService {
         'publicKey',
         'keyId',
       ]);
-      this.setConnectState('connecting:key');
+      this.updateConnectState();
       await this.process(info.url, {
         publicKey,
         keyId,
@@ -59,7 +61,9 @@ export class KeyAutoAddService {
       });
       await this.validate(walletAddress.id, keyId);
     } catch (error) {
-      this.setConnectState('error:key');
+      if (!error.key || !error.key.startsWith('connectWallet_error_')) {
+        this.updateConnectState(error);
+      }
       throw error;
     }
   }
@@ -152,9 +156,17 @@ export class KeyAutoAddService {
     }
   }
 
-  private setConnectState(status: 'connecting:key' | 'error:key' | null) {
-    const state = status ? { status } : null;
-    this.storage.setPopupTransientState('connect', () => state);
+  private updateConnectState(err?: ErrorWithKeyLike | { message: string }) {
+    if (err) {
+      this.storage.setPopupTransientState('connect', () => ({
+        status: 'error:key',
+        error: isErrorWithKey(err) ? errorWithKeyToJSON(err) : err.message,
+      }));
+    } else {
+      this.storage.setPopupTransientState('connect', () => ({
+        status: 'connecting:key',
+      }));
+    }
   }
 }
 
diff --git a/src/background/services/openPayments.ts b/src/background/services/openPayments.ts
index 84220c41..1f7ecec0 100644
--- a/src/background/services/openPayments.ts
+++ b/src/background/services/openPayments.ts
@@ -29,10 +29,13 @@ import { exportJWK, generateEd25519KeyPair } from '@/shared/crypto';
 import { bytesToHex } from '@noble/hashes/utils';
 import {
   ErrorWithKey,
+  errorWithKeyToJSON,
   getWalletInformation,
+  isErrorWithKey,
   withResolvers,
+  type ErrorWithKeyLike,
 } from '@/shared/helpers';
-import { AddFundsPayload, ConnectWalletPayload } from '@/shared/messages';
+import type { AddFundsPayload, ConnectWalletPayload } from '@/shared/messages';
 import {
   DEFAULT_RATE_OF_PAY,
   MAX_RATE_OF_PAY,
@@ -332,12 +335,13 @@ export class OpenPaymentsService {
     });
   }
 
-  async connectWallet({
-    walletAddressUrl,
-    amount,
-    recurring,
-    skipAutoKeyShare,
-  }: ConnectWalletPayload) {
+  async connectWallet(params: ConnectWalletPayload | null) {
+    if (!params) {
+      this.setConnectState(null);
+      return;
+    }
+    const { walletAddressUrl, amount, recurring, skipAutoKeyShare } = params;
+
     const walletAddress = await getWalletInformation(walletAddressUrl);
     const exchangeRates = await getExchangeRates();
 
@@ -379,7 +383,8 @@ export class OpenPaymentsService {
       );
     } catch (error) {
       if (
-        error.message === this.t('connectWallet_error_invalidClient') &&
+        isErrorWithKey(error) &&
+        error.key === 'connectWallet_error_invalidClient' &&
         !skipAutoKeyShare
       ) {
         // add key to wallet and try again
@@ -394,11 +399,11 @@ export class OpenPaymentsService {
             tabId,
           );
         } catch (error) {
-          this.setConnectState('error');
+          this.updateConnectStateError(error);
           throw error;
         }
       } else {
-        this.setConnectState('error');
+        this.updateConnectStateError(error);
         throw error;
       }
     }
@@ -457,6 +462,9 @@ export class OpenPaymentsService {
       amount: transformedAmount,
     }).catch((err) => {
       if (isInvalidClientError(err)) {
+        if (intent === InteractionIntent.CONNECT) {
+          throw new ErrorWithKey('connectWallet_error_invalidClient');
+        }
         const msg = this.t('connectWallet_error_invalidClient');
         throw new Error(msg, { cause: err });
       }
@@ -578,10 +586,21 @@ export class OpenPaymentsService {
     }
   }
 
-  private setConnectState(status: 'connecting' | 'error' | null) {
+  private setConnectState(status: 'connecting' | null) {
     const state = status ? { status } : null;
     this.storage.setPopupTransientState('connect', () => state);
   }
+  private updateConnectStateError(err: ErrorWithKeyLike | { message: string }) {
+    this.storage.setPopupTransientState('connect', (state) => {
+      if (state?.status === 'error:key') {
+        return state;
+      }
+      return {
+        status: 'error',
+        error: isErrorWithKey(err) ? errorWithKeyToJSON(err) : err.message,
+      };
+    });
+  }
 
   private async redirectToWelcomeScreen(
     tabId: NonNullable<Tabs.Tab['id']>,
diff --git a/src/popup/components/ConnectWalletForm.tsx b/src/popup/components/ConnectWalletForm.tsx
index 65f82858..ece16642 100644
--- a/src/popup/components/ConnectWalletForm.tsx
+++ b/src/popup/components/ConnectWalletForm.tsx
@@ -37,6 +37,7 @@ interface ConnectWalletFormProps {
   saveValue?: (key: keyof Inputs, val: Inputs[typeof key]) => void;
   getWalletInfo: (walletAddressUrl: string) => Promise<WalletAddress>;
   connectWallet: (data: ConnectWalletPayload) => Promise<Response>;
+  clearConnectState: () => Promise<unknown>;
   onConnect?: () => void;
 }
 
@@ -46,6 +47,7 @@ export const ConnectWalletForm = ({
   state,
   getWalletInfo,
   connectWallet,
+  clearConnectState,
   saveValue = () => {},
   onConnect = () => {},
 }: ConnectWalletFormProps) => {
@@ -60,7 +62,15 @@ export const ConnectWalletForm = ({
   const [recurring, setRecurring] = React.useState<Inputs['recurring']>(
     defaultValues.recurring || false,
   );
-  const [autoKeyShareFailed, setAutoKeyShareFailed] = React.useState(false);
+  const [autoKeyShareFailed, setAutoKeyShareFailed] = React.useState(
+    isAutoKeyAddFailed(state),
+  );
+
+  const resetState = React.useCallback(async () => {
+    await clearConnectState();
+    setErrors((_) => ({ ..._, keyPair: '', connect: '' }));
+    setAutoKeyShareFailed(false);
+  }, [clearConnectState]);
 
   const [walletAddressInfo, setWalletAddressInfo] =
     React.useState<WalletAddress | null>(null);
@@ -68,8 +78,18 @@ export const ConnectWalletForm = ({
   const [errors, setErrors] = React.useState({
     walletAddressUrl: '',
     amount: '',
-    keyPair: '',
-    connect: '',
+    keyPair:
+      state?.status === 'error:key'
+        ? isErrorWithKey(state.error)
+          ? t(state.error)
+          : state.error
+        : '',
+    connect:
+      state?.status === 'error'
+        ? isErrorWithKey(state.error)
+          ? t(state.error)
+          : state.error
+        : '',
   });
   const [isValidating, setIsValidating] = React.useState({
     walletAddressUrl: false,
@@ -239,6 +259,7 @@ export const ConnectWalletForm = ({
         autoComplete="on"
         spellCheck={false}
         enterKeyHint="go"
+        readOnly={isSubmitting}
         onPaste={async (ev) => {
           const input = ev.currentTarget;
           let value = ev.clipboardData.getData('text');
@@ -255,6 +276,7 @@ export const ConnectWalletForm = ({
             }
           }
           const ok = await handleWalletAddressUrlChange(value, input);
+          resetState();
           if (ok) document.getElementById('connectAmount')?.focus();
         }}
         onBlur={async (ev) => {
@@ -265,6 +287,7 @@ export const ConnectWalletForm = ({
             }
           }
           await handleWalletAddressUrlChange(value, ev.currentTarget);
+          resetState();
         }}
       />
 
@@ -286,7 +309,7 @@ export const ConnectWalletForm = ({
             placeholder="5.00"
             className="max-w-32"
             defaultValue={amount}
-            readOnly={!walletAddressInfo?.assetCode}
+            readOnly={!walletAddressInfo?.assetCode || isSubmitting}
             addOn={<span className="text-weak">{currencySymbol.symbol}</span>}
             aria-invalid={!!errors.amount}
             aria-describedby={errors.amount}
@@ -325,7 +348,7 @@ export const ConnectWalletForm = ({
             details: errors.keyPair,
             whyText: t('connectWallet_error_failedAutoKeyAddWhy'),
           }}
-          hideError={autoKeyShareFailed}
+          hideError={!errors.keyPair}
           text={t('connectWallet_label_publicKey')}
           learnMoreText={t('connectWallet_text_publicKeyLearnMore')}
           publicKey={publicKey}
@@ -408,6 +431,21 @@ const ManualKeyPairNeeded: React.FC<{
   );
 };
 
+function isAutoKeyAddFailed(state: PopupTransientState['connect']) {
+  if (state?.status === 'error') {
+    return (
+      isErrorWithKey(state.error) &&
+      state.error.key !== 'connectWallet_error_tabClosed'
+    );
+  } else if (state?.status === 'error:key') {
+    return (
+      isErrorWithKey(state.error) &&
+      state.error.key.startsWith('connectWalletKeyService_error_')
+    );
+  }
+  return false;
+}
+
 const Footer: React.FC<{
   text: string;
   learnMoreText: string;
diff --git a/src/popup/pages/Settings.tsx b/src/popup/pages/Settings.tsx
index 34cff522..5e10314a 100644
--- a/src/popup/pages/Settings.tsx
+++ b/src/popup/pages/Settings.tsx
@@ -34,6 +34,7 @@ export const Component = () => {
           // But we reload it, as it's open all-time when running E2E tests
           window.location.reload();
         }}
+        clearConnectState={() => message.send('CONNECT_WALLET', null)}
       />
     );
   }
diff --git a/src/shared/messages.ts b/src/shared/messages.ts
index 89176c0c..fc0e8ccc 100644
--- a/src/shared/messages.ts
+++ b/src/shared/messages.ts
@@ -115,7 +115,7 @@ export type PopupToBackgroundMessage = {
     output: PopupState;
   };
   CONNECT_WALLET: {
-    input: ConnectWalletPayload;
+    input: null | ConnectWalletPayload;
     output: void;
   };
   RECONNECT_WALLET: {
diff --git a/src/shared/types.ts b/src/shared/types.ts
index 1bbe913e..5898e09f 100644
--- a/src/shared/types.ts
+++ b/src/shared/types.ts
@@ -1,5 +1,6 @@
 import type { WalletAddress } from '@interledger/open-payments/dist/types';
 import type { Tabs } from 'webextension-polyfill';
+import type { ErrorWithKeyLike } from './helpers';
 
 /** Bigint amount, before transformation with assetScale */
 export type AmountValue = string;
@@ -109,9 +110,10 @@ export type PopupTabInfo = {
 };
 
 export type PopupTransientState = Partial<{
-  connect: Partial<{
-    status: 'connecting' | 'connecting:key' | 'error' | 'error:key' | null;
-  }> | null;
+  connect:
+    | null
+    | { status: 'connecting' | 'connecting:key' }
+    | { status: 'error' | 'error:key'; error: string | ErrorWithKeyLike };
 }>;
 
 export type PopupStore = Omit<