Visa proposes Ethereum auto-payment scheme

Visa has proposed a blockchain account design that could allow Ethereum users to arrange auto-payments from a self-custodied wallet.

The payments giant described its approach in a blog post on Monday, Dec. 19. That post summarized an earlier research paper that was published in August.

Visa proposes using Account Abstraction, an Ethereum feature that is currently under consideration by core developers, to implement automatic payments.

The company says that this allows users to set up recurring bill payments. Ethereum does not allow this at a basic level, as automated smart contracts cannot request transactions. Rather, user accounts must initiate and send transactions manually.

Visa noted that although bank accounts and custodial crypto wallets can be easily used to arrange auto-payments, this type of payment is “not as straightforward to execute on a blockchain.” As such, implementing the feature in a self-custodied wallet ⁠— one in which the user has complete control over their funds ⁠— is a challenge.

The company said that it explored a possible solution as part of its internal Crypto Hackathon challenge this year.

Visa explained that, by using account abstraction, it was able to combine the functions of user accounts and smart contracts into a single type of Ethereum account. The company called the resulting account a “delegable account.”

This approach allows a merchant to deploy an automatic payment smart contract. After a user with a delegable account grants permission, a merchant can trigger a payment by calling the charge function of the automatic payments contract. The user’s delegable account also adds the auto-payment contract to a whitelist for future payments.

Visa noted that Ethereum itself has not yet implemented Account Abstraction, with exists as part of various proposals such as EIP-4337. In light of those limitations, Visa implemented delegable accounts on StarkNet, a layer-2 network for Ethereum that extends the base blockchain’s functionality to support the feature.

Though Visa seemingly produced a working auto-payments solution, it did not indicate that it will offer the feature to its clients.

It seems unlikely that the feature will be implemented within Visa’s wide array of crypto payment cards, which are often linked to custodial exchanges. However, the feature could conceivably be used in Visa’s merchant- and bank-oriented settlement services, which may need to interact with non-custodial Ethereum wallets.