The payments company Visa released a document on Monday exploring the potential for automated crypto payments.
Possible collaboration with Ethereum
Global payments giant Visa hinted its continued interest in crypto on Monday. The company released a document outlining how the company could one day partner with Ethereum on automatic payments.
It document, which was sparked by an internal company hackathon held earlier this year, details how Ethereum users, in partnership with Visa, can schedule automatic payments sent from crypto wallets. Such a capability is not yet possible on the Ethereum mainnet. However, this could be made possible by a popular Ethereum proposition called “Account Abstraction”. This would allow users of Ethereum to function as smart contracts and provide pre-planned execution functions.
Although automatic crypto payments are not immediately having a dramatic impact on the banking and payments landscape, it is a sign that Visa intends to become an active player in the crypto world.
We want to have the opportunity to actively contribute to technical developments in the crypto ecosystem. The best way to do that is to learn by doing. This actually means going deeper into Web3 infrastructures and blockchain protocols. Areas that I think will be very important for the future of payments.
– Catherine Gu of Visa
Gu’s group is actively exploring what other blockchain technologies are poised to reshape the world of payments. In addition, they are investigating how quickly their adoption can be implemented.
According to Gu, that day is not very close.
This technology is currently still in its infancy, but it has a future. A lot of research needs to be done on the fundamental aspects that are important for payments. Examples include security and scalability.
– Catherine Gu of Visa
The scalability of blockchains
An abiding elusive goal for blockchains like Ethereum is scalability. Simply the ability to maintain network security while enabling cheap and instant transactions at scale. Many anticipated updates to the Ethereum network are aimed at addressing this issue. An example of this is Proto-thank hardening, an early version of a system that could one day radically reduce the amount of data required to process massive volumes of Ethereum transactions. The launch is expected sometime next year.
From a payments perspective, most blockchain networks are not yet scalable enough to process transactions at very high speeds in a secure and trusted manner.
—Catherine Gu
Until networks like Ethereum can scale, they are unlikely to be integrated by large companies like Visa. However, Visa, which has been in regular contact with Ethereum’s core developers, is very optimistic.
This optimism is a departure from the grim sentiment surrounding crypto, which has been dominated over the past month by the demise of the crypto exchange FTX and its disgraced founder, Sam Bankman-Fried.
It is very important to find out what the signal is and what is causing the noise. We look at this technology longer term. It can be of real use, and that’s why we’re here, to invest more, to do research.
—Catherine Gu
In October, the company filed trademarks, revealing it was considering a crypto wallet and metaverse product. A month later, Visa pulled the plug on a partnership with FTX.
That same month, rival payment company Mastercard partnered with crypto trading platform Paxos to launch crypto trading for banks.