Visa Envisions plans to facilitate automated payments on the Ethereum Blockchain
Payments facilitator Visa has released a technical paper detailing plans to channel Ethereum functionality for customers’ automatic payments.
Visa (NYSE: V ) is reportedly planning to let customers make automatic payments from their Ethereum (ETH) self-sufficient crypto wallets. According to the payments giant, crypto users will one day be able to automatically pay their subscription video-on-demand, phone and electricity bills via their self-managed crypto wallets. In addition, Visa stated that the automated payments would be on a recurring basis, so that customers would no longer need to initiate the transactions each time. Automated bill payments are common in the traditional financial space, and Visa now looks to combine this concept with blockchain technology.
Speaking about the need to establish a seamless digital payment structure that promotes easy settlement of bills, Visa explained:
“Online bill payment 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-payment plan would work
According to Visa, the arrangement of automatic payments may be possible via a new type of self-deposit wallet called “delegable accounts”. This type of wallet is based on the concept of Account Abstraction, which can facilitate new forms of multi-owner and public accounts. Visa said:
“This application may allow a user to set up a programmable payment instruction that can automatically transfer funds from one self-custodial account to another at recurring intervals, without requiring the user’s active participation each time.”
Visa also noted that the delegable accounts would allow users to create a whitelist of pre-approved automatic payments. This development would thus eliminate the need for the owner’s signature for each payment. However, the company acknowledged in its technical document that the technology required to back up the delegable accounts requires extensive engineering. The reason is that the technology must be able to allow the user’s account to function as 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
Visa’s automated payments proposal is part of the company’s broader agenda for blockchain innovation that harnesses the power of Ethereum. So far, the payments giant has been conducting ongoing research into new ways to circumvent the hard-coded rigid requirements for Ethereum transactions.
Catherine Gu, the co-author of the Visa crypto auto-payment proposal, also weighed in on the company’s plan. According to Visa’s head of central bank digital currencies and protocols, if one of the primary use cases of blockchain is payment facilitation, then the “fundamental requirement is for the technology to work as well 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 asked to explore and develop a mechanism that combined Ethereum-based wallets and smart contracts into a single account.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the basics so anyone anywhere can understand without too much background knowledge. When he is not deep into crypto stories, Tolu likes music, loves to sing and is an avid movie buff.
