Payment facilitator Visa has posted a technical paper delineating plans to channel Ethereum functionality for customer auto payments.
Visa (NYSE: V) is reportedly planning to let customers make auto payments from their Ethereum (ETH) self-custodied crypto wallets. According to the payments giant, crypto users would someday be able to automatically pay their subscription video-on-demand, telephone, and electricity bills via their self-custodial crypto wallets. In addition, Visa stated that the automated payments would be on a recurring basis so customers no longer need to initiate the transactions each time. Automated payments for bills are commonplace in the traditional finance space, and Visa now looks to marry this concept with blockchain technology.
Speaking on the need to establish a seamless digital payment structure that promotes the ease of settling bills, Visa explained:
“Online bill pay is growing rapidly, and customers – especially younger ones – have come to expect the ability to set up recurring payments and take advantage of other conveniences associated with using their Visa cards.”
How the Proposed Visa-Ethereum Auto Payments Plan Would Work
According to Visa, the auto payments scheme could be possible via a new type of self-custodial wallet called “delegable accounts.” This type of wallet is based on the concept of Account Abstraction, which could facilitate new forms of multi-owner and public accounts. Visa stated:
“This application could allow a user to set up a programmable payment instruction that can push funds automatically from one self-custodial wallet account to another at recurring intervals, without requiring the user’s active participation each time.”
Visa also noted that the delegable accounts would enable users to create a whitelist of pre-approved auto payments. This development would thereby eliminate the need for the owner’s signature for each payment. However, the company acknowledged in its technical paper that the technology required to back the delegable accounts requires extensive engineering work. The reason is that the technology needs to be capable of allowing the user’s account to function like a smart contract.
According to Visa, a delegable account essentially combines the functions of a user account and a smart contract into a single type of Ethereum account.
Visa Looks to Fully Maximize Blockchain Technology
The Visa auto payments proposal feeds into the company’s broader agenda for blockchain innovation that leverages the power of Ethereum. So far, the payments giant has carried out ongoing research into new ways of getting around the hardcoded rigid requirements of Ethereum transactions.
Catherine Gu, the co-writer of the Visa crypto auto payments proposal, also weighed in on the company’s plan. According to the Visa head of central bank digital currencies and protocols, if one of the primary use cases of blockchain is payments facilitation, then the “basic requirement is that the technology has to function just as good as today, if not better.”
Ethereum co-founder Vitalik Buterin also previously touched on the concept of Account Abstraction back in 2015. At the time, the computer programmer called for exploring and developing a mechanism that combined Ethereum-based wallets and smart contracts into a single account.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
