A blog post was written by the payments giant Visa presenting a new solution that allows automatic programmable payments for self-custodial wallets on Ethereum. The blog post was published on the Ethereum blockchain.
According to the article on the blog, the idea entails the possibility of turning up access to one’s private keys to a smart contract that would be responsible for making payments on one’s behalf.
It is difficult to enable auto-payments for self-custodial wallets, which means that auto-payments have the potential to compromise the security that is guaranteed by self-custody.
Account Abstraction (AA) is a proposal made by Visa that integrates user accounts and smart contracts into a single kind of Ethereum account by giving user accounts the ability to operate in the same way as smart contracts.
As Visa’s response to auto payments, the company plans to create a new sort of account contract that will be known as a “delegable account.” AA will be used in this endeavor. Users of a delegable account, which would not need the owner’s signature each time a payment is made, would have the ability to compile a whitelist of pre-approved automatic payments for usage on their accounts.
To facilitate “push payments,” or transactions that are often issued with the necessity for user signatures, Ethereum was designed specifically for this purpose.
Customers have the option to accept these recurring payments, which might be restricted to a set monthly payment limit or customized. Visa wants to allow retailers to begin accepting “pull payments.”
For the implementation to take place, there must first be a change made to the way in which the Ethereum network manages accounts. On Ethereum’s mainnet, transactions may currently only be initiated by user accounts; smart contracts are not authorized to do so at this time.
Visa implemented the solution by using the StarkNet scaling platform since account abstraction, which makes it possible for smart contracts to handle transactions on behalf of a client, is not currently functional on Ethereum Mainnet.
Visa has indicated that they believe automatic payments are a fundamental capability that the current blockchain technology is lacking. Other real-world applications, in addition to recurring payments, might potentially be placed onto the blockchain by using the methodology that we have shown here.
Compiled by Coinbold