Visa is trying to get auto-payments on Ethereum by creating a new type of wallet—a process the company calls “account abstraction.”
Visa is looking at ways it can help the Ethereum ecosystem develop.
Today the payments giant published a technical paper in which it explored the possibility of developing an automatic payment system for self-custodial wallets on Ethereum.
“Online bill pay 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,” states the paper, before claiming that ease of payment is the main reason why customers tend to change payment methods.
Enabling auto-payments for self-custodial wallets is challenging, since the idea entails possibly giving access to one’s private keys to a smart contract in charge of making the payments on one’s behalf. Effectively, auto-payments can potentially threaten the security provided by self-custody.
According to the Visa team, the solution to that problem comes in the form of account abstraction—meaning a combination of user wallet and smart contracts in one Ethereum account. This would reportedly give more flexibility to the process of validating a transaction on the blockchain: among other things, Visa believes it would enable multi-owner accounts (through multi-sig) and public accounts from which anyone could make a transaction.
Practically speaking, users would be able to create a whitelist of pre-approved auto-payments on a “delegable account,” which would not require the owner’s signature every time a payment is made.
It remains to be seen whether account abstraction is everything Visa makes it out to be. The team claimed that “because [an auto payment contract] is a smart contract, a user can be confident that [it] cannot execute in a way other than how it is written,” a phrase that may sound a little naïve to crypto natives having already seen their wallets drained when accidentally signing a malicious smart contract.
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.
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