Visa engineers design automatic payment application for the Ethereum blockchain
(Kitco News) –
A team of Visa researchers and engineers have outlined a smart contract application for a self-custodial wallet on the Ethereum blockchain that could enable programmable payment instructions like automated bill payments through a bank account.
Visa announced the new application design in a blog post on Monday. “To help our clients and partners innovate, we need to immerse ourselves in technologies that can bring real value to the payments ecosystem,” said Catherine Gu, Head of CBDC and Protocols at Visa. “We’re focused on growing our core competencies in Web3 infrastructure layers and blockchain protocols driving crypto development.”
Visa published the details of the auto payment application in a new technical piece, which explains how to write a smart contract application for a self-custodial wallet, “a wallet that is controlled exclusively by the user and the associated private key.” This application would enable a user to set up “a programmable payment instruction that can push funds automatically from one self-custodial wallet account to another at recurring intervals, without requiring the user’s active participation each time.”
The application is built around the idea of Account Abstraction (AA), “a developer proposal currently being explored within the Ethereum ecosystem.” Account Abstraction makes user accounts on Ethereum work more like smart contracts by allowing users to set up programmable features in their wallets.
In the technical paper, Visa engineers demonstrate “a new type of account contract that can delegate the ability to initiate a payment by a user account to a pre-approved autopayment smart contract, mimicking the process you use today to set up a recurring card payment.”
“Our solution for auto payments is to leverage AA and create a new type of account contract – a delegable account,” they write. “Our main idea is to extend programmable validity rules for transactions to include a pre-approved allow list. In essence, AA allows us to delegate the ability to instruct the user’s account to initiate a push payment to a pre-approved auto payment smart contract.”
According to the paper, a merchant would first deploy an auto payment smart contract on their website. “When a user with a delegable account visits the merchant’s website, they will see a request to approve auto payments – similar to Visa acceptance for billers today,” they wrote. “Here, the user can see the actions that the auto payment contract will do in the user’s name.”
The user could then select the option to be charged only once per month, and could also limit the maximum charge amount. Once the user approves auto payments, their wallet would then add the auto payment contract’s address to the list of allowed contracts on the user’s delegable account.
Once concepts like AA are enabled on the Ethereum blockchain, Visa said that their proposal “could help bring familiar payments experiences, like auto payments, to the blockchain ecosystem.”
“While blockchain technology and digital assets are still in their infancy, we’re digging into these emerging innovations to determine how they can impact money movement today, and into the future,” they wrote. “Visa will continue to explore these evolving technologies and concepts — including common consensus mechanisms, privacy and scaling solutions, and other possible blockchain use cases — to create a bridge between crypto ecosystem and our global network of clients and merchant locations.”
Last month Visa was forced to terminate their highly publicized partnership with FTX four days after the exchange declared bankruptcy. The plan, which was announced in early October, called for FTX Visa debit cards to be rolled out across 40 countries with a focus on Latin America, Asia and Europe.
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