According to banking behemoth Visa, cryptocurrency consumers may someday be capable to remotely pay their phone and utility bills using their self-custodial crypto wallets.
The Visa team stated that it has already successfully tried its delegable accounts on a private chain from layer 2 scaling solution StarkNet, as the network supports AA.
Over the years, many digital payment platforms have incorporated cryptocurrencies into their existing activities. As a result, cryptocurrency payment gateways have emerged for people to use in the same way that bank credit cards are explored. Now, with cryptocurrency gateways, you can accept digital payments and get paid immediately in fiat money.
To further these use cases, payments giant Visa has announced that cryptocurrency users may be able to seamlessly pay their phone and utility bills using their self-custodial crypto wallets.
Visa's thought leadership team on cryptocurrencies put forth a remedy in a blog post on December 20. This solution would let providers automatically draw money from customers' Ethereum-powered crypto wallets without necessitating the user to approve each transaction personally.
In the conventional financial sector, auto payments for repetitive bills are prevalent. Users can authorize specific service providers to withdraw money from their preferred bank accounts to pay bills, like a Netflix subscription or a regularly occurring phone bill.
According to Visa, such a system is not feasible for holders of self-custodial wallets since automatic programmable payments periodically withdrawing money from a user's account need engineering work.
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This is because, with self-custodial wallets, only the user can access the private keys, necessitating their manual approval of all transactions. After all, a smart contract cannot begin transactions by itself.
In its technical article, Visa stated there'd be a new kind of self-custodial wallet called delegable accounts. They are founded on the "Account Abstraction" (AA) idea and would allow automatic recurring payments in cryptocurrency.
Ethereum co-founder Vitalik Butering proposed the idea in 2015. It enables combining smart contracts and Ethereum-based wallets into a single account, among several other use cases.
The Visa team claims user accounts will work like smart contracts through an AA-based self-custody wallet or delegable account. This implies that customers may arrange transactions without signing off to conduct every transaction individually.
The proposal is part of a larger investigation by the blockchain-friendly company into new opportunities for blockchain innovation and a way to overcome strict constraints hardcoded into Ethereum transactions.
The development team acknowledges that there's an ease with which users can link auto-payments into wallets hosted by third parties, like exchanges. But still, users must have faith that these organizations will adequately manage their assets.
This was shown to be a significant concern this year, particularly in light of the failures of FTX, Voyager, BlockFi, and Celsius, to name a few.
The article also notes that AA has been included in several Ethereum Improvement Proposals over the years but has eventually fallen through due to implementation difficulties. This is because it necessitates several protocol adjustments and the fulfillment of "security guarantees."
The Visa team claimed that because the network enables AA, it has already successfully tested its delegable accounts on a private chain using the layer 2 scaling solution StarkNet.
Since the Visa team was able to integrate delegable accounts into StarkNets' "account model," the piece believes that auto payments are within reach.
Do you see Visa achieving success with this innovation? Kindly share your thoughts with us in the comments section.
