Visa proposed a solution to support auto payments using blockchain technology
Visa proposed a solution in a blog post to support auto payments for self-custodial wallets using blockchain technology. Recently, the crypto thought leadership team at payments leader Visa, put forth a solution through a blog post that would let providers automatically draw money from customers' Ethereum-powered crypto wallets without requiring the user to personally approve each transaction using blockchain technology. According to Visa's team, users can schedule transactions without signing off to initiate them through an AA-based self-custody wallet or delegable account.
The Visa team claimed that, because the network enables AA, has already successfully tested its delegable accounts on a private chain from layer 2 scaling solution StarkNet. The Visa team was able to integrate delegable accounts under StarkNets' account model, the post concludes.
In its technical article, Visa stated that this new kind of self-custodial wallet is based on the "Account Abstraction" (AA) idea. Using Ethereum, Visa is demonstrating that self-custodial wallets can execute auto-payments. It would allow automatic recurring payments in cryptocurrency. The Visa team claims that user accounts will work like smart contracts through an AA-based self-custody wallet or delegable account, which means customers may schedule transactions without signing off to initiate each one individually.
The suggestion is a part of a larger investigation by the blockchain-friendly company exploring fresh opportunities for blockchain innovation and a way to get beyond strict constraints hardcoded into Ethereum transactions.
The article also highlights that AA has been included in a number of Ethereum Improvement Proposals over the years, which have fallen due to implementation difficulties. This is because it necessitates several protocol adjustments and the fulfillment of security guarantees.
The idea was proposed by Ethereum co-founder Vitalik Butering in 2015. It essentially enables the combination of smart contracts and Ethereum-based wallets into a single account.
According to Visa, a system where users can authorize specific service providers to withdraw money from their preferred bank accounts to pay bills is not feasible for owners of self-custodial wallets, as for that system automatic, programmable payments that periodically withdraw money from a user's account need engineering work. It is also a fact that in self-custodial wallets, only the user has access to the private keys, necessitating their manual approval of all transactions as a smart contract cannot initiate transactions on its own.
The study report that served as the basis for the Visa blog post on the topic was released in August 2022. The news comes after Visa applied for trademarks covering a wide range of cryptocurrency devices, including a wallet, at the end of October 2022.
CBW - External Analyst