Account abstraction makes it possible: Wirex issues debit cards that allow you to pay anywhere from your Ethereum wallet – while retaining full control. Sounds too good to be true, but it is true.

What fascinating but initially confusing news: The online wallet Wirex, which has long combined wallets and debit cards, is opening a decentralized payment network with WPay. This should allow you to spend your cryptocurrencies and tokens at more than 50 million retailers worldwide using a non-fiduciary debit card.

I’m sorry, what? A “non-fiduciary debit card” that can be used to pay anywhere like other cards? How is that supposed to be possible?

It is possible, and Wirex is not the only provider. Gnosis Pay started sending non-fiduciary debit cards around this week. But let’s stick with Wirex for now.

Wirex explains that the user starts with a normal Ethereum wallet. Metamask, Encrypt, and so on. The user then connects this ordinary wallet with a “smart wallet” based on “account abstraction”. Among other things, he can set spending limits for these. The smart wallet stands between the user and the debit card, which is from Visa or MasterCard, and, according to the plan, also the bank account.

“Behind the scenes, payments are processed seamlessly by the WPay platform,” writes Wirex. “There is no reason to worry about the details. WPay takes care of the processing processes with Visa, Mastercard and the merchants.”

Wirex doesn’t reveal much more. That’s pretty thin. Somehow account abstraction is at the heart of the construction, but why and how remains obscure.

To understand what is happening here, you should visit the Visa website. There, the credit card provider presents a solution on how to “write a smart contract for a non-fiduciary wallet that allows credit to be drawn automatically instead of requiring the user’s participation for every push payment.” That could answer our question .

The core problem is this: When using a non-fiduciary crypto wallet, only “pull transactions” are possible, i.e. transactions that the sender initiates. Direct debits and standing orders are impossible. This is the fundamental limitation of crypto as a means of payment.

Account abstraction removes this limitation. First, Account Abstraction turns a simple account into a smart contract. This makes it possible for the user to define any conditions as to how the content of an address can be output. In principle this can be anything, a password, a calculation, a time, a temperature…

Visa thereby creates a “delegable account”: The owner of the account gives other parties the right to initiate payments via another smart contract. The construction at Visa goes something like this: a user allows a merchant to initiate payments via a special smart contract, i.e. to “pull” money out of the wallet. To prevent misuse, the user can set spending limits. This would give us a direct debit.

Whether exactly like this or slightly modified, Wirex’s WPay uses account abstraction to form a non-fiduciary debit card, and Visa and MasterCard are in on the game, and there’s basically no reason stopping banks from getting in on the act too.

In addition, Wirex apparently uses an “appchain” to process payments. This is “WPay” or “W-Pay”. This appchain was developed by Polygon’s SDK. It is, explains Wirex, “a network optimized for a specific application. It is designed to optimize performance, security and functionality for this specific application.”

The specific task in this case is apparently to execute pull payments via account abstraction, possibly also to exchange the tokens in a wallet for dollar tokens. It would be possible for various payment providers to join WPay to execute direct debits, debit cards and so on, so that the WPay chain breaks open the closed payment networks of credit card providers.

The Appchain is connected to the Ethereum blockchain via zero-knowledge proof. Users can bridge their native Ethereum wallet to the Appchain, and transactions on the Appchain are anchored on the Ethereum blockchain.

Things are pretty similar with Gnosis Pay. The debit cards are non-fiduciary thanks to Account Abstraction, and they run on “Gnosis Pay”, an L2 – Second Layer – on the Gnosis Chain, a fork of Ethereum.

But we don’t want to go any deeper into the technology at this point. The great news at issue here is that we can now officially connect our non-fiduciary wallets to debit cards!


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