Visa’s Account Abstraction: Automate Payments with Ethereum Smart Contracts

• Visa recently proposed a system called “Account Abstraction” that uses smart contracts to enable automated, programmable payments on Ethereum.
• This solution involves the creation of a smart contract that acts as an intermediary between a user account and a contract account, allowing for the creation of a self-custodial wallet that can make automatic recurring payments without requiring the active participation of the user.
• This system would allow for the automation of payments through the use of smart contracts, allowing for the creation of “delegable accounts.”

Visa, a payments processor, recently proposed a system known as “account abstraction” that uses smart contracts to enable automated, programmable payments on Ethereum. Account Abstraction (AA) is a proposal that seeks to combine user accounts and smart contracts into a single type of account on the Ethereum blockchain. This is made possible by allowing for the creation of validity rules for individual transactions.

This system involves the creation of a smart contract that acts as an intermediary between a user account and a contract account, allowing for the creation of a self-custodial wallet that can make automatic recurring payments without requiring the active participation of the user. Currently, there are two types of accounts on the Ethereum network: Externally Owned Accounts (EOA) controlled by a private key, and Contract Accounts (CA), which are essentially smart contracts. EOAs can initiate transactions, but CAs cannot. However, by using Account Abstraction it is possible to create a smart contract that can initiate transactions on behalf of an EOA, enabling the creation of a self-custodial wallet that can make automatic recurring payments.

One use case for AA is the creation of “delegable accounts,” which allow for the automation of payments through the use of smart contracts. With a delegable account, a user can delegate the ability to initiate a payment to a pre-approved smart contract, known as an “auto payment contract.” This auto payment contract would be able to initiate payments automatically when certain conditions are met. For example, a user could set up a contract that pays their rent automatically each month.

To deploy this system on the Ethereum layer 2 network StarkNet, Visa proposed using a custom-built token that operates on a sidechain. This token would be used to facilitate payments between the user and the smart contract. The user would be able to set up their own smart contract, which would be able to make automatic payments without requiring the active participation of the user.

Visa’s proposed Account Abstraction system has the potential to revolutionize the way payments are made on Ethereum. By allowing for the creation of self-custodial wallets that can make automated, programmable payments, users will have more control over their finances and will be able to make payments faster and more securely. Additionally, this system could help to reduce the cost of payments, as automated payments would be cheaper than manual payments.