Visa thinks up plans for you to automatically pay your bills with your crypto wallet

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According to payments giant Visa, crypto users may one day be able to automatically pay their electricity and phone bills through their self-service crypto wallets.

In a December 20 blog post, the Visas crypto management team proposed a solution that would allow providers to automatically withdraw funds from users of Ethereum-powered crypto wallets, without requiring the user to manually sign each transaction.

Automatic payments for recurring bills are commonplace in the traditional banking world, giving users the ability to allow certain service providers to tap into bank accounts of their choice to pay bills such as a Netflix subscription or bill monthly phone call.

Such a mechanism is not possible for owners of self-custodial wallets, Visa said, noting that automated scheduled payments that extract payments from a user’s account at recurring intervals “require some engineering work.”

Indeed, in self-custodial wallets, the user is the only person who controls the private keys, which means that he must manually sign transactions because a smart contract cannot initiate transactions on its own.

In its technical paper, Visa said automatic recurring payments via crypto would be possible through a new type of self-custodial wallet called delegable accounts, which is based on the concept of account abstraction (AA).

Ethereum co-founder Vitalik Butering came up with the concept in 2015, which essentially allows Ethereum-based wallets and smart contracts to be combined into a single account among other use cases.

Through a self-custodial wallet or an AA-based delegable account, the Visa team says user accounts would work like smart contracts, meaning people can schedule transactions without logging out to initiate each transaction.

This app could allow a user to set up a programmable payment instruction that can automatically transfer funds from one self-custodial wallet account to another at recurring intervals, without requiring the user’s active participation each time, read- we in the message.

The proposal is part of the broader search by crypto-friendly companies for new avenues for blockchain innovation and for circumventing rigid hard-coded requirements in Ethereum transactions.

AA has many potential use cases, especially on how the user experience on a digital wallet can be significantly improved with more flexibility built into the user account to function more like a smart contract.

— Catherine Gu (@catgu_) December 19, 2022

The team admits that while automatic payments can be integrated relatively easily via wallets hosted by other parties such as exchanges, this of course means that the user should have confidence that their funds will be handled appropriately by said parties. .

This has proven to be a major risk this year, especially given the bankruptcies of FTX, Voyager, BlockFi, and Celsius, to name a few.

Related: Ethereum bulls wake up after four years to transfer 22,982 ETH

The post also points out that AA was proposed as part of several Ethereum Improvement Proposals (EIPs) over the years, but ultimately fell through due to its difficulty in implementation. This is due to the fact that it requires many protocol changes and security safeguards to adhere to.

The Visa team said it had already successfully tried its delegable accounts on a private channel of the StarkNet layer two scaling solution, as the network supports AA.

As such, the post concludes that automatic payments aren’t far off given that he was able to implement delegable accounts into the StarkNets account model.

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