The credit card giant Visa has introduced their newest proposal for Ethereum integration. This will allow Ethereum transactions possible without a third party. Self-payments will be possible through self-custodial wallets.
These transactions using Visa and the Ethereum integration will probably be done using Account Abstraction, a feature of Ethereum that is currently being reviewed for automatic payments. Customers can pay recurring bills using this service, something Ethereum does not now provide.
The Process of Integration with Ethereum
Visa emphasized that by using account abstraction, it could combine the functionalities of user accounts and smart contracts into a single model of an Ethereum account. They referred to the resulting account as a “delegable account.”
This method enables a retailer to set up smart contracts for automatic payments. A merchant can make a payment through the charge function of automated payments. The user’s delegable account also adds the auto-payment contract to a whitelist for upcoming payments.
This feature came about due to the Crypto Hackathon Challenge 2022. The user of the Visa integration must manually request and carry out the transaction under Ethereum’s features. Bank accounts and custodial wallets support the feature. However, self-custodial wallets do not. As noted, “on the blockchain, these kinds of transactions are not that straightforward.”
Catherine Gu, the co-writer of the Visa proposal, wrote, “If one of the major use cases of blockchain is for payments, then the basic requirement is that the blockchain has to function just as good as today, if not better.”
The Ongoing Bear Market
This concept arose as the cryptocurrency market was still recovering from the consequences of the FTX collapse and the Terra Sisters crash. Investors will undoubtedly find reassurance and hope in aligning cryptocurrencies with banks.
In addition, Visa is partnering with Ethereum to improve security, handle a high volume of transactions, speed up transactions, and integration of other blockchains while maintaining customer privacy.