Visa explores auto payments from StarkNet
Visa is exploring options to automatically send recurring payments without requiring manual transaction signing. The solution will be implemented on StarkNet, a Layer 2 blockchain.
Visa has begun using a new concept and one of Ethereum's leading tools, Account Abstraction, to explore how smart contracts can be implemented for automated programmable payments. They offer a unique solution for real-world applications of automated payments. It will allow you to create a smart contract for a wallet that can withdraw funds automatically instead of requiring active user participation each time to send payments to the blockchain.
An example of a problem and its solution
Consider a hypothetical scenario: Today is February 25. Alex is going on vacation and will be back on March 10. He must pay his mortgage, TV subscription, and utilities by the 5th of each month. As of February 25, he needs more funds to pay for it before his vacation. But he will receive his salary on March 1. The question is, how will Alex enjoy his vacation without missing payments?
Alex needs to set up recurring payments on his Visa card to pay his recurring bills automatically. And these are automatic payments! Indeed, if Alex had a bank account, this would be a simple process. However, this is more challenging to accomplish on the Ethereum blockchain. There are two types of accounts on the Ethereum network today: externally owned accounts (EOAs), more commonly referred to as "user accounts," and contract accounts (CAs), referred to as smart contracts. A user account controlled by a private key can send transactions. A smart contract has associated code that can be executed, but the smart contract cannot initiate transactions independently. Transactions must always be made from the user's account and signed by the user.
So what to do if Alex wants to schedule automatic payments via the blockchain?
Account Abstraction (AA) is a tool that attempts to combine user accounts and smart contracts into a single type of Ethereum account, making user accounts function as smart contracts.
The solution for automatic payments is to use AA and create a new account agreement – a delegable account.
Visa wants to set up automated payments through smart contracts, using the StarkNet blockchain in its tests. It allows you to send payments from your wallets without signing each transaction. While Ethereum verifies that the signature matches the given address, StarkNet checks that the transaction comes from a given address.
Reportedly, the company has already tested the technology using the Argent wallet.
Visa believes that such a solution will allow many more applications to be transferred to the blockchain since this functionality needs to be improved.
We see auto payments as a core functionality that existing blockchain infrastructure lacks.
