Automatic payments on Ethereum? Visa says it’s possible

Visa is trying to get automatic payments on Ethereum by creating a new type of wallet – a process the company calls “account abstraction“.

Mixing portfolios and smart contracts

The payments giant today released a technical paper in which it explored the possibility of developing an automatic payment system for self-deposited wallets on Ethereum.

“Online bill pay is growing rapidly, and customers – especially younger ones – now expect to be able to set up recurring payments and enjoy other conveniences associated with using their Visa cards“, the paper says, before asserting that ease of payment is the primary reason customers tend to switch payment methods.

Enabling automatic payments for self-guaranteed wallets is a challenge, as the idea involves potentially giving access to one’s private keys to a smart contract responsible for making payments on one’s behalf. Indeed, automatic payments can potentially threaten the security provided by self-guarding.

According to the Visa team, the solution to this problem comes in the form of an account abstraction, which is a combination of user wallet and smart contracts in a single Ethereum account. This would give more flexibility to the process of validating a transaction on the blockchain: in particular, Visa thinks it would allow for multi-owner accounts (thanks to multi-sig) and public accounts from which anyone could perform a transaction.

In practice, users could create a whitelist of pre-approved auto-payments on a “delegable account“, which would not require the owner’s signature each time a payment is made.