Visa is Looking to Bring Auto Payments to Ethereum Network Users

The payments giant has proposed a method for users to schedule automatic payments using non-custodial wallets.

Dec 23, 2022
by Akira Ming
Visa is Looking to Bring Auto Payments to Ethereum Network Users
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Here's how Ethereum wallets can enable auto payments, according to Visa

Visa, a global payment processor, recently published a technical piece describing how to leverage the Ethereum blockchain for automatic payments in crypto. 

According to the paper, the solution involves a technique called "Account Abstraction (AA)," which Ethereum co-founder Vitalik Buterin said was one of his priorities for 2023. 

The problem with implementing auto-payments in the current system, according to Visa, is that Ethereum only supports "push payment." This means that only users themselves can initiate and sign transactions to move their tokens. 

Of course, they could also utilize a custodial wallet, entrusting a third party to sign transactions on their behalf. But this often leads to security concerns as private keys are held by a third-party custodian. 

So, how can users enable auto payments while using a self-custodial wallet? Per the company's proposal, this is where Account Abstraction steps in. The idea of AA is that it will combine user accounts and smart contracts into one Ethereum account type, making user accounts function just like smart contracts. 

This gives rise to a new account contract known as a "delegable account" with a pre-approved allow list. Those who want to schedule automatic payments only have to add that particular auto-payment contract address to the list. So when the charge function is called, the pre-approved contract will trigger the user's wallet to initiate a push payment, allowing auto payments through Ethereum. 

It's worth noting that Visa has implemented the above solution on StarkNet, an Ethereum Layer 2 chain based on ZK-rollup. According to Visa, Starknet's account model simply checks that the transaction comes from a given address instead of checking whether the transaction also comes with a correct signature for that address. This offers the flexibility to enable auto payments for non-custodial wallets.

"We see auto-payments as a core functionality that existing blockchain infrastructure lacks," wrote Visa in the paper. "At Visa, our goal is to help create better user experiences leveraging existing as well as new payment rails. To that end, we believe that programmable money and programmable payments represent an exciting opportunity."

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