In order to achieve this, Visa wants to leverage Account Abstraction, which is a proposal that attempts to combine user accounts and smart contracts into just one Ethereum account type by making user accounts function like smart contracts.
This Ethereum feature is currently under consideration by core developers in the context of implementing automatic payments. The idea of turning the smart contract itself into a wallet was proposed in 2015 by Ethereum creator Vitalik Buterin and formalised in 2017 as the Ethereum Improvement Proposal (EIP) 86.
Account Abstraction enables users to set up recurring bill payments, but the issue is that Ethereum does not allow this at a basic level because automated smart contracts cannot request transactions. Instead, transactions need to be manually initiated and sent by user accounts.
Visa representatives noted that this type of payment is not easy to execute on a blockchain, while bank accounts and custodial crypto wallets can support it easily. The challenge comes when trying to implement auto-payments in a self-custodied wallet, meaning one in which the user has complete control over his or her funds.
Visa’s 2022 internal Crypto Hackathon challenge explored a potential solution by blending the functions of user accounts and smart contracts into a single type of Ethereum account. This delegable account would allow merchants to deploy an automatic payment smart contract. In order for this to work, a user with a delegable account needs to grant permission while the merchant can trigger a payment by calling the charge function of the automatic payments contract.
Visa implemented delegable accounts on StarkNet, which is a permissionless decentralised Validity-Rollup. StarkNet operates as an L2 network over Ethereum, allowing any dApp to achieve unlimited scale for its computation without sacrificing Ethereum's security.
According to Forbes, aside from its research on automating payments, the Visa team is working with Ethereum developers outside the company to increase the capacity to handle large volumes of transactions, provide increased security, and interoperate with other blockchains, all while protecting user privacy.
Visa launched its crypto-linked card in 2015 and was one of the first major payment companies to foray into digital assets. Nowadays, the company competes with Mastercard, PayPal, and Block (formerly Square) in bringing crypto payments into the mainstream.
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