Visa is exploring to enable auto-debit feature from your crypto wallet

Subh Rath

December 20, 2022

Visa is attempting to obtain auto-payments on Ethereum by developing a new sort of wallet—a technique known as “account abstraction.” The payments company released a technical paper investigating the feasibility of creating an automated payment mechanism for self-custodial wallets on Ethereum.

The paper maintains, “Online bill pay is rapidly growing, and customers—particularly younger ones—have come to expect the ability to set up recurring payments and take advantage of other conveniences associated with using their Visa cards.” It also claims that ease of payment is the primary reason customers switch payment methods.

Enabling auto-payments for self-custodial wallets is difficult. It includes potentially granting access to one’s private keys and authorising a smart contract to make payments on behalf of one’s account. Auto-payments, in effect, can jeopardize the security given by self-custody.

According to Visa, the solution to this challenge is account abstraction, a mix of a user wallet and smart contracts in a single Ethereum account. This would purportedly add additional flexibility to the process of authenticating a transaction on the blockchain, allowing for multi-owner accounts (via multi-sig) and public accounts from which anybody might initiate a transaction.

In practice, users could construct a whitelist of pre-approved auto-payments on a “delegable account,” eliminating the need for the owner’s signature every time a payment is made.

Visa aimed to make a big push into the crypto space with its recent alliance with FTX, a global crypto exchange. Visa planned to use its innovative solutions to enhance crypto payments technology and enable users to transact with digital currencies in over 40 countries around Latin America, Asia, and Europe. However, they had to cancel the partnership after it collapsed. Despite this setback, Visa stays ahead of the curve by ambitiously exploring viable options for processing digital currency payments within its vast infrastructure.