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Thanks to automated systems, customers would be able to initiate payments quickly. Automated bill payments are routine in the conventional financial sector; Visa seeks to merge this notion with blockchain technology.
Today, @Visa announced a major industry first: the use of USD Coin (USDC) to settle a transaction with Visa over the @Ethereum public #blockchain: https://t.co/QiCuOGns77 pic.twitter.com/GVVGrzuBgo
— VisaNews (@VisaNews) March 29, 2021
How Visa-Ethereum Automatic Payments Systems Work
Visa claims that a new form of self-custodial wallet dubbed “delegable accounts” might make the automatic payments plan a reality. This wallet design rests on Account Abstraction, which may open the door to new types of shared and public wallets.
A user of this software could schedule automated funds transfers between two self-custodial wallet accounts regularly without needing to do it manually each time.
Additionally, user-created whitelists of pre-approved auto payments will be possible with the delegable accounts. The owner’s signature won’t be required for any payments anymore.
However, in its technical paper, the firm admitted that intensive engineering effort is needed to support the technology behind the delegable accounts. The user’s account should operate similarly to a smart contract if the technology is to be helpful.
Regarding Ethereum accounts, Visa claims delegable accounts are the most versatile since they serve as user accounts and smart contracts.
Visa Aims to Leverage Blockchain to Its Full Potential
Visa’s proposed use of blockchain technology for automatic payments is one component of the company’s larger initiative to develop blockchain-based innovations using Ethereum’s robust computing capacity. The payments giant has been studying innovative ways to circumvent the strict constraints of Ethereum transactions for some time now.
According to Visa’s head of central bank digital currencies and protocols, the primary need is for the technology to perform as effectively as today if payment facilitation is a significant use case of blockchain.
Ethereum co-creator Vitalik Buterin mentioned Account Abstraction before, back in 2015. The computer programmer at the time advocated investigating and creating a system that merged Ethereum-based wallets with smart contracts.