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Auto-Payments on Ethereum? Visa Says it’s Possible

Gus – Cryptocurrency Expert 

  • Visa is establishing auto-payments for the Ethereum network, creating a new wallet

  • Wallets and Smart Contracts Being Mixed

  • Visa is considering how it can support the growth of the Ethereum ecosystem

Today, the industry leader in payments released a technical study that examined the potential for creating an automatic payment mechanism for Ethereum self-custodial wallets.

The paper states, ‘Online bill pay is growing quickly, 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,’ before asserting that ease of payment is the primary factor behind why customers typically switch payment methods.

Enabling auto-payments for self-custodial wallets is challenging because the concept requires potentially giving access to one's private keys to a smart contract in charge of making the payments on one's behalf. In essence, auto-payments run the risk of undermining the security that comes with self-custody.

The Visa team claims that account abstraction, or the merging of a user wallet and smart contracts in a single Ethereum account, is the answer to that issue. According to reports, this would purportedly increase the flexibility of the blockchain validation process. Visa, for example, thinks it would enable multi-owner accounts (through multi-sig) and public accounts from which anybody may do business.

Users would be able to create a whitelist of pre-approved automatic payments on a delegable account, which would not require the owner's signature each time a payment is processed.

If user abstraction is all Visa promises it to be, it will be interesting to observe. According to the team, ‘because is a smart contract, a user can be confident that cannot execute in a way other than how it is written,’ which may sound naive to crypto natives who have already had their wallets drained by unintentionally signing a malicious smart contract.

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