According to payments giant Visa, cryptocurrency users may someday be able to automatically pay their phone and utility bills using their self-custodial crypto wallets.
Visa’s thought leadership team on cryptocurrencies put forth a solution in a blog post on December 20 that would let providers automatically “pull” money from customers’ Ethereum-powered crypto wallets without requiring the user to personally approve each transaction.
The article described how a user might set up an application that would automatically transfer funds from one self-custodial wallet account to another at regular intervals without requiring the user’s active involvement each time.
The ability to authorize specific service providers to withdraw funds from users’ preferred bank accounts to pay bills, like a Netflix subscription or a recurring phone bill, is a standard practise in the traditional banking industry.
Owners of self-custodial wallets are unable to deploy such a mechanism, according to Visa, which noted that “engineering work” is necessary for automated programmable payments that periodically withdraw money from a user’s account.
This is so that transactions can be manually approved because “a smart contract cannot initiate transactions on its own” in self-custodial wallets, where the user is the only one in possession of the private keys.
Visa said in its article that a new class of self-custodial wallet dubbed “delegable accounts,” which is based on the “Account Abstraction” (AA) idea, would make it feasible to make cryptocurrency automatic recurring payments.
In 2015, Ethereum co-founder Vitalik Butering proposed the idea, which essentially makes it possible to merge smart contracts and wallets based on Ethereum into a single account and other use cases.
The Visa team claims that user accounts will “function like smart contracts” through an AA-based self-custody wallet or delegable account, meaning that customers may schedule transactions without signing off to initiate each one individually.
The article also notes that AA has been considered for inclusion in a number of Ethereum Improvement Proposals (EIPs) throughout the years, but has ultimately fallen short due to its complexity in implementation. This is because it necessitates several protocol adjustments and the fulfilment 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 from Layer Two scaling solution StarkNet.
Given that delegable accounts were able to be implemented under StarkNets’ “account model,” the essay concludes that auto payments are not far off.
In October, Visa submitted two trademark applications with the United States Patent and Trademark Office (USPTO) claiming plans for controlling digital, virtual, and cryptocurrency transactions, and more.
Businesses connected to cryptocurrencies and the metaverse have filed trademark applications with the USPTO in increasing numbers. A week before Visa filed for the trademarks numerous crypto businesses like Paypal and Western Union submitted trademark applications. In the crypto and metaverse, Formula One registered “F1” as a trademark for eight distinct goods and services earlier this month. Ford made a similar submission of 19 trademark applications in September. The largest online retailer in the world, eBay, submitted two in June, Facebook owner Meta provided five in May, and Mastercard submitted fifteen in April.