Visa Exploring Innovative Ethereum Auto-Payment Scheme
Visa is reportedly exploring the use of Ethereum’s blockchain technology to enable automatic payments. Forbes reported that the payment giant is said to be testing a pilot program that uses Ethereum smart contracts to trigger payments on certain predefined events, such as the expiration of a subscription or the reaching of a certain threshold.
According to sources, the pilot program has been in the works for several months and is currently being tested by a select group of Visa employees. If successful, the program could potentially be rolled out to a wider audience in the future.
The use of smart contracts for automatic payments has the potential to streamline many financial processes, as it allows for the automation of payment triggers based on specific events. This could reduce the need for manual intervention and help to eliminate errors and discrepancies in financial transactions.
It is not yet clear how Visa plans to integrate Ethereum’s blockchain technology into its existing payment infrastructure, or how the pilot program will be received by the wider financial community. However, the company’s exploration of blockchain technology for automatic payments is a promising development and could potentially lead to significant advancements in the way financial transactions are conducted.
Internal Hackathon Reveals Major Solution
Visa has been experimenting with a new type of Ethereum account called a delegable account, which combines the functions of user accounts and smart contracts. This type of account allows merchants to set up automatic payment smart contracts that can be triggered by calling the charge function. To use a delegable account, a user must grant permission for the merchant to initiate the payment.
The company has implemented delegable accounts on StarkNet, a decentralized Validity-Rollup that operates as a layer 2 network on top of Ethereum. StarkNet allows any decentralised application to scale its computation without sacrificing Ethereum’s security.
In addition to its work on automating payments, Visa is collaborating with Ethereum developers to improve its capacity for handling large volumes of transactions, enhance security, and enable interoperability with other blockchains while protecting user privacy. Visa was one of the first significant payment companies to enter the digital asset space with its crypto-linked card in 2015 and now competes with Mastercard, PayPal, and Block (formerly Square) in bringing cryptocurrency payments into the mainstream.
The exploration into delegable accounts and Ethereum capabilities came as a result of Visa’s 2022 Internal Hackathon.