The solution would enable Ethereum (ETH) holders to set up auto payments directly from their self-custodial wallets.
A leading payments giant, Visa, recently released a proposal outlining how it plans to partner with Ethereum to allow ETH holders to set up automatic payments. A research paper published states that ETH holders can schedule auto-payments directly from their self-custodial digital currency wallets.
How Visa Birthed the Innovation
It bears mentioning that the paper was sparked by an internal Visa hackathon held earlier this year. In February, Visa employees were asked to solve the problem of how ETH holders could send payments on a future date while not connected to the internet.
The auto-payment process is simple through the traditional financial system, as account holders can easily specify such instructions. However, the initiative is not yet feasible on public blockchains like Ethereum.
While the auto-payments feature is not yet available on the Ethereum network, Visa outlined that the solution would be enabled via an Ethereum proposal dubbed Account Abstraction (AA).
Providing more details into the concept of AA, Visa’s head of Central Bank Digital Currencies (CBDC) Catherine Gu said the proposal was first brought to life by Ethereum’s co-founder Vitalik Buterin in 2015.
— Catherine Gu (@catgu_) December 19, 2022
AA was later formalized in 2017 as Ethereum Improvement Proposal (EIP) 86. At the moment, AA is marked as stagnant due to inactivity in the past six months. With Visa’s support, Ethereum user accounts can perform smart contracts and pre-scheduled execution functions.
Visa to Actively Contribute to Crypto Growth
Visa believes crypto and blockchain will play a vital role in the long-term future of payments.
“If one of the major use cases of blockchain is for payments, then the basic requirement is that the blockchain has to function just as good as today, if not better,” Gu said.
It is noteworthy that the initiative further signals Visa’s interest in crypto and blockchain technologies. The leading payment giant wants to play an integral role in crypto by developing solutions that would contribute to the growth of emerging tech.
Gu noted that the best way to foster crypto growth is to learn and delve deep into the world of Web 3.0 and blockchain protocols – the two major areas Visa’s CBDC head believes are essential for the global payment industry.
“We want to have an opportunity to actively contribute to technical developments happening in the crypto ecosystem […] The best way to do that is learning by doing — actually getting deeper into Web3 infrastructure and blockchain protocols, areas I think are going to be really important for payments,” Gu said.
Meanwhile, the recent proposal is not Visa’s first foray into the world of cryptocurrencies. As reported by TheCryptoBasic, Visa filed a trademark application in October to launch a platform that will grant users access to crypto and non-fungible tokens (NFTs).