Visa To Introduce New Smart Contract Payment System

Global credit giant Visa has been investigating programmable payments and smart contracts. The business hopes to enable automatic payments for Ethereum owners.

According to a proposal made public by Visa, Ethereum owners can set up programmable payments using their self-custodial wallets. Furthermore, The idea would also do away with banks and other centralized third – parties from the transactions.

On most bank accounts, setting up automatic payments has proven simple. However, the bank ultimately has authority over the transmission of money and the system. The market leader Ethereum is where Visa is launching its foray into the world of self-custodied cryptocurrencies.

The firm is eager to enter what will eventually be the future of payments, despite the severe crypto market fall.

VISA discussing Ethereum account abstraction (EIP 4337)

Ethereum Accounts Will Be Combined With Visa

The proposal was co-written by Catherine Gu, vice president of protocols and digital currencies at Visa.

She stated:

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.

Account Abstraction is a cutting-edge idea that is used in the proposal. Furthermore, it is one of the most popular ideas from Ethereum developers for implementing automatic payments using smart contracts.

Accounts on the Ethereum platform can be externally owned (user accounts) or connected to smart contracts. Using account abstraction, Visa intends to merge them into a single Ethereum account. Additionally, this would enable Ethereum user accounts to behave as intelligent contracts.

Account abstraction, codified initially in 2017 as EIP-86 by Vitalik Buterin, has several benefits. Delegable accounts and multi-signature verification allow for the creation of multi-owner accounts. A public report is also permitted to use to do business.

Essentially, AA allows for programmable validity to verify and validate any blockchain transaction.

Visa explained

On Ethereum, AA has yet to be used. However, the most current EIP-4337 from 2021 suggests an AA technique without making any changes to network protocols.

Credit Giant Collaborating With Ethereum Developers

In addition, Outside Ethereum developers are collaborating with the Visa team. It intends to strengthen the ability to manage high transaction volumes and offer improved security and interoperability.

Visa submitted two trademark requests in late October, announcing ambitions for cryptocurrency wallets. There were also measures for controlling and auditing cryptocurrency holdings and utility tokens.

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Additionally, in October, the company joined forces with Wall Street bank JP Morgan to work on private blockchains to streamline international payments.

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