The central theses
- Visa believes automatic payments on Ethereum are possible.
- The company shared a technical paper arguing that account abstraction would allow self-custody wallets to set up automatic payments in a convenient way.
- Account abstraction could also allow for new forms of multi-owner accounts and public accounts.
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Visa is attempting to receive automatic payments on Ethereum by creating a new type of wallet – a process the company calls “account abstraction”.
Mix wallets and smart contracts
Visa is looking for ways to help the Ethereum ecosystem develop.
Today the payments giant published a specialized work in which it studied the possibility of developing an automatic payment system for self-custodial wallets on Ethereum.
“Online bill payment is growing rapidly, and customers — particularly younger ones — have come to expect the ability to set up recurring payments and enjoy other conveniences that come with using their Visa cards,” the paper said, before using them Taking advantage of payment facility is the main reason why customers tend to change payment methods.
Enabling automatic payments for self-custodial wallets is challenging as the idea is to potentially grant access to one’s private keys to a smart contract in charge of making the payments on its behalf. In fact, automatic payments can potentially compromise the security offered by self-custody.
According to the Visa team, the solution to this problem lies in the form of account abstraction – that is, a combination of user wallet and smart contracts in an Ethereum account. This would reportedly add more flexibility to the process of validating a transaction on the blockchain: among others, Visa believes it would allow for accounts with multiple owners (through multi-sig) and public accounts, each of which could conduct a transaction.
In practical terms, users could whitelist pre-approved automatic payments on a “delegable account” that would not require the owner’s signature on every payment.
It remains to be seen if account abstraction is all Visa claims to be. The team claimed that “because [an auto payment contract] is a smart contract, a user can rely on it [it] cannot be executed other than as written,” a phrase that might sound a little naïve to crypto-natives who have already seen their wallets drained when they accidentally signed a malicious smart contract.
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH and several other crypto assets.
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