Payments giant Visa is exploring methods that will facilitate automatic recurring payments for self-custodial wallets using blockchain such as Ethereum.
In a technical paper, researchers at Visa stated that despite the growing use of blockchain, establishing automatic recurring payments is a tough job as several digital wallets need engineering infrastructure to enable pull payments.
This issue needs to be addressed as consumers find automatic recurring payments a convenient mode of transaction, a requirement corroborated by the paper.
Nearly three out of ten surveyed consumers have changed their bill payments method in the last two years with convenience cited as the reason, according to the paper.
Such changes can be made easily in a banking app, but they are not easy to incorporate on some digital wallets, the paper added.
Researchers at Visa wrote in the technical paper: “For certain types of digital wallets, such as a self-custodial wallet where the user has sole control over the wallet and private keys, automated programmable payments that can pull payments automatically from a user’s account at recurring intervals requires engineering work.”
Furthermore, the researchers used a new concept called account abstraction to find out how smart contracts can be used to allow automated programmable payments.
The researchers said: “We propose a new solution towards a real-world application of auto payments to demonstrate how to write a smart contract for a self-custodial wallet that can pull funds automatically, instead of requiring the user’s active participation each time to instruct and push payments on a blockchain.”
The latest development comes shortly after Visa announced its plan to spend $1bn across its business in Africa over the next five years to support the use of digital payments.