Visa Proposes Automatic Payments Using Ethereum StarkNet

Visa has recently proposed an “account abstraction,” which uses smart contracts to enable automatic programmable payments on Ethereum.

This solution involves creating a smart contract as an intermediary between user and contract accounts. It creates a self-custodial pocket that can make automatic, recurring payments without the need for active participation.

Visa stated that such a move would enable recurring payments to be made entirely over blockchain networks. These networks are currently devoid of this capability.

The company suggested that the system be deployed on StarkNet, an Ethereum layer of two networks.

There are currently two types of Ethereum accounts: Contract Accounts (CA) and Externally Owned Accounts. Private keys control these accounts. EOAs can initiate transactions, but CAs are not.

Visa stated that Account Abstraction allows you to create a smart agreement to initiate transactions for an EOA. This will allow you to create a self-custodial wallet with automatic recurring payments.

Account Abstraction (AA), a proposal, aims to combine user accounts and smart contracts into one type of account on the Ethereum blockchain.

This is possible because it allows for creating and modifying validity rules for individual transactions. One example of AA’s use is creating “delegable” accounts, allowing automated payments via smart contracts.

Visa stated that a delegable account allows a user to delegate the power to initiate a payment to an approved smart contract. This is known as an “autopayment contract.” This might work: A user visits a merchant’s site and agrees that auto payments are allowed.

The address of the auto payment contract is then added to the user’s allow list. A merchant could then initiate a payment by calling the charge function of the auto payment contract.

This will cause the account to initiate a valid payment because it is on the allowed list. Visa should have revealed plans to use this system in its offerings of services as of Tuesday.

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