VISA Introduces the Possibility of Getting Automatic Payments for Ethereum Users

American multinational giant and payments firm VISA has recently hinted at the possibility of introducing automatic payments for Ethereum users through their self-custodied wallets.

On Monday, December 19, VISA published a blog post detailing how Ethereum users can leverage automatic payments directly from their self-custodial wallets without the need of Anu manual transaction signing. This will completely eliminate the need of banks or other centralized entities.

To accomplish automatic payments through blockchain-based smart contracts, VISA will leverage an Ethereum feature dubbed Account Abstraction.

Currently, automated smart contracts cannot request transactions and user accounts need to initiate and send transactions manually. VISA said that although it is easy to arrange automatic payments through bank accounts and crypto custodial wallets, it is very difficult to implement on a public blockchain platform.

By using Account Abstraction, VISA said that they were able to combine the function of user accounts as well as smart contracts into a single type of Ethereum account dubbed “delegable account”.

Using this approach, VISA allows merchants to deploy automatic payment smart contracts. Once the user with delegable accounts grants permission, a merchant can trigger a payment just by calling the charge function within the automatic payments smart contract. Later, the delegable account of the user will add these auto-payment smart contracts to a whitelist for any future payments.

However, note that the Ethereum blockchain has yet to Account Abstraction which will be part of the Ethereum Improvement Proposal EIP-4337. VISA said that they are currently testing these delegated accounts on Ethereum’s Layer-2 network StarkNet which extends the base blockchain’s functionality to test the features.

Although VISA has successfully tested this automatic payments smart contracts feature, it did not indicate when will it offer the feature to its clients. Some of the areas of focus include scalability, security, interoperability, privacy, etc.

Along with Ethereum, VISA’s engineers and researchers are working to evaluate the foundations of different blockchains. Speaking on the development, Catherine Gu, Visa’s Head of CBDC and Protocols, said: “This technology is very nascent right now, but there could be something there down the road. A lot of research needs to be done around fundamental aspects important for payments, like security and scalability.”

“It's very important to figure out what's the signal and what's the noise. We’re taking a much longer-term perspective on this technology. It may have real utility, and that’s why we’re here: to invest more, to do research,” she added.