Visa intends to employ Account Abstraction to facilitate automatic payments.
The AA concept combines two Ethereum accounts into a single account.
Visa is still interested in cryptocurrency as a payment method.
Smart contracts and programmable payments for several years. Reports noted that the company wants to enable Ethereum holders to set up automatic payments.
As a result, Visa announced a proposal on Dec 20 that would allow Ethereum holders to set up programmable payments from their own self-custodial wallets. Furthermore, the approach would eliminate the use of banks and other centralized third parties in transactions.
Automatic payments have been simple to set up on regular bank accounts. However, the bank eventually controls the network and the funds being transferred. Visa is foraying into the world of self-custodied crypto, and it is starting with the industry standard.
Visa noted in its proposal that automatic recurring payments via cryptocurrency will be enabled via a new sort of self-custodial wallet dubbed "delegable accounts," which is based on the "Account Abstraction" (AA) concept.
Account abstraction, which Vitalik Buterin first codified in 2017 as EIP-86, has a variety of advantages. Using Account Abstraction, Visa aims to combine two Ethereum accounts into a single Ethereum account type. This would also provide smart contract capabilities for Ethereum user accounts. Visa explained,
"This application might allow a user to configure a programmable payment instruction that can automatically transmit funds from one self-custodial wallet account to another at repeated intervals, without requiring the user's active participation each time."
This indicates that the proposal is part of Visa's broader exploration into new paths for blockchain innovation. Additionally, the company filed two trademark applications earlier in October for its own crypto wallets. The company also partnered with Wall Street bank JP Morgan to work on private blockchains that would streamline international payments.
Not only Visa, but its competitor Mastercard is also venturing into the crypto and blockchain space. On October 17, Mastercard officially unveiled a new program dubbed "Crypto Source" that will allow financial institutions to offer crypto trading capabilities and services to their customers.
This implies that payment giants such as Mastercard and Visa are eagerly looking for ways to expand their hands in the crypto industry.
What are your thoughts on Visa’s automatic payment solution and the concept of Account Abstraction? Share your views in the comment section below.
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