Visa proposed a blockchain account design allowing Ethereum users to arrange auto-payments using a self-custodial vault. In a blog post posted Monday, December 19, the payments giant explained its approach. This post summarized an August research paper.
Visa proposes using Account Abstraction, an Ethereum feature currently being considered by core developers, to implement automatic payments.
According to the company, this will allow users to set up recurring bill payments. This is not possible on Ethereum at the basic level, as smart contracts can’t request transactions. Instead, transactions must be initiated and sent manually by user accounts.
Visa stated that auto-payments could be made using bank accounts or custodial crypto wallets. However, it is more challenging to do so on a blockchain.
According to the company, it had explored possible solutions as part of its Internal Crypto Hackathon Challenge this year.
Visa explained that account abstraction allowed it to combine user accounts and smart contract functions into one type of Ethereum account.
The company referred to the account as a “delegable” account. This allows merchants to create an automatic payment smart contract.
A merchant can call the charge function in an automatic payments contract to trigger a payment after a user has permission.
Delegable accounts allow users to add the auto-payment contract as an allowlist to enable future payments. Visa pointed out that Ethereum still needs to implement Account Abstraction. However, it exists in various proposals like EIP-4337.
Visa created StarkNet, a layer-2 network that supported the feature and provided delegable accounts to address these limitations.
Although Visa did appear to have a working solution for auto payments, it didn’t indicate that it would offer it to its clients.
The feature is unlikely to be implemented in Visa’s large array of crypto payment cards. These cards are often linked with custodial exchanges. The feature could be used by Visa’s merchant-oriented and bank-oriented settlement services. These services may have to interact with noncustodial Ethereum wallets.