Payment System Giant Visa Proposes Working with Ethereum for Automatic Transactions – How Does it Work?
Payments giant Visa has released a proposal that would allow Ethereum users to make automated programmable payments without the involvement of any third party.
According to a recent crypto thought leadership post, the company plans to achieve this goal using a smart contract that acts as an intermediary between a user account and a contract account, creating a self-custodial wallet that can make automatic recurring payments without the involvement of banks or other centralized entities.
While such services are already available to bank account holders and users of traditional financial companies, the capability is not currently available over blockchain networks. Therefore, Visa aims to become the first company to bring such capabilities to the Ethereum network.
“On the blockchain, these kinds of transactions are not that straightforward,” the company said, adding that it plans to deploy the solution on the Ethereum layer 2 network, StarkNet. Visa’s head of central bank digital currencies and protocols, Catherine Gu, who co-wrote the proposal, said:
“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.”
Visa said they came up with this feature as a result of its Crypto Hackathon Challenge, 2022, a competition among the company’s employees in February to solve the problem of how an ETH owner could pay a bill with crypto at a future date while temporarily away from internet service.
As of now, there are two types of accounts on the Ethereum network: Externally Owned Accounts (EOA), which are controlled by a private key, and Contract Accounts (CA), which are essentially smart contracts.
EOAs can initiate transactions
Read more on cryptonews.com
