Global payments processing giant Visa (NYSE:V) released a technical paper in which it provided details on how it can collaborate with the Ethereum (ETH-USD) network to offer automatic payments. Visa believes that the Ethereum feature Account Abstraction (AA), currently being worked on by core developers, can be leveraged to implement automatic payments.
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Visa noted that Ethereum is designed for push payments (those triggered by the payee) but doesn’t natively support pull payments (those triggered by the payer). Recurring auto payments, like bill payments, come under pull payments. Ethereum network has two kinds of accounts – user accounts and contract accounts or smart contracts. Visa suggested that the AA feature can be used to combine the functions of user accounts and smart contracts into a single type of Ethereum account, called a “delegable account.”
When the user with a delegable account visits the merchant’s website, he/she will see a request to approve auto payments. If the user approves the auto payments, the wallet will add the auto payment contract’s address to the list of allowed contracts on the delegable account. When the merchant triggers a payment through the charge function of the auto payment contract, the contract will make the user account initiate a push payment.
Visa further added that since Ethereum does not yet support AA, the company implemented its delegable accounts solution on StarkNet, a secondary layer blockchain, commonly called a “Layer Two blockchain.” Overall, Visa seems to be exploring innovative solutions to expand into the crypto space even as the FTX bankruptcy has shaken the market.
What is the Forecast for Visa Stock?
Visa scores the Street’s Strong Buy consensus rating based on 17 Buys, one Hold, and one Sell. The average Visa stock price target of $250.44 implies 22.3% upside potential from current levels. Shares have declined 5.5% year-to-date.
