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Visa Dreams up Plans so you can Auto-Pay Bills with Your Crypto Wallet

Bills are often paid automatically through traditional banking, and Visa has come up with a way to do the same thing with blockchain technology.

Visa, a big name in payments, says that one day crypto users may be able to set up their self-custodied crypto wallets to automatically pay their electricity and phone bills.

In a blog post on December 20, Visa’s crypto thought leadership team suggested a way for providers to automatically “pull” funds from users’ Ethereum-powered crypto wallets without the user having to sign off on each transaction.

In traditional banking, it’s common for recurring bills to be paid automatically. Users can give certain service providers permission to take money from their bank accounts to pay bills, like a Netflix subscription or a monthly phone bill.

Visa said that owners of self-custodial wallets can’t use such a system because “engineering work” is needed for automated, programmable payments that pull money from a user’s account at set times.

This is because, in self-custodial wallets, the user is the only one who has access to the private keys. Since a smart contract can’t start a transaction on its own, the user must sign off on every transaction by hand.

Visa said in its technical piece that automatic recurring payments could be made with cryptocurrency using a new type of self-custodial wallet called “delegable accounts,” which is based on the idea of “Account Abstraction” (AA).

Vitalik Butering, one of the people who helped start Ethereum, came up with the idea in 2015. It basically lets Ethereum wallets and smart contracts be combined into a single account, among other things.

The Visa team says that user accounts would “work like smart contracts” with an AA-based self-custody wallet or delegable account. This means that people could schedule transactions without having to sign off on each one.

The post says, “This application could let a user set up a programmable payment instruction that can move money automatically from one self-custodial wallet account to another at regular intervals, without the user having to do anything each time.”

The proposal is part of the crypto-friendly company’s larger effort to find new ways to improve blockchain technology and get around the strict requirements that are hardcoded into Ethereum transactions.

The team does admit that auto-payments can be added fairly easily through wallets hosted by other parties, like exchanges. However, this means that the user would have to trust that their funds will be handled properly by these parties.

This turned out to be a big risk this year, especially since FTX, Voyager, BlockFi, and Celsius, to name a few, all went out of business.

The post also mentions that AA has been suggested as part of multiple Ethereum Improvement Proposals (EIPs) over the years, but hasn’t been implemented because it’s hard to do so. This is because it needs a lot of changes to the protocols and “security guarantees to be met.”

The Visa team said that it has already tried its delegable accounts on a private chain from Layer Two scaling solution StarkNet, which supports AA.

As a result, the post comes to the conclusion that automatic payments aren’t too far away, since StarkNets’ “account model” can already handle accounts that can be given to other people.


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