Circle’s Recibo: A Breakthrough for Merchants and Blockchain Payments

February 1, 2025 by Sadia Ali

1. Circle’s Recibo enables on-chain payment transactions with encrypted messages, enhancing real-world use cases like invoices and receipts.
2. It integrates with ERC-20 tokens and supports gasless transactions.
3. It provides a secure and flexible solution for merchants, financial institutions, and users to include encrypted data in payments.

This week, Circle’s CEO, Jeremy Allaire, shared the launch of Recibo, a groundbreaking open-source project designed to enhance blockchain transactions with encrypted messaging capabilities. Recibo allows users to include messages and metadata in their payments, such as invoices, receipts, and other necessary transaction details.

With this feature, Circle’s Recibo addresses a significant gap in the current blockchain payment ecosystem, particularly the absence of a message line in the widely-used ERC-20 standard.

Circle’s Recibo Enhances On-Chain Transactions

Currently, businesses face challenges when integrating traditional payment requirements like invoices and receipts into blockchain transactions. To solve this, Recibo enables encrypted messages to be attached to transactions on any Ethereum Virtual Machine (EVM) chain.

This addition facilitates accounting, tax payments, and regulatory compliance directly on the blockchain without the need for off-chain workarounds.

Merchants can now attach digital receipts to their transactions, while users can send shopping cart IDs or payment invoices along with their transfers. Additionally, Circle’s Recibo supports ISO20022 payment messages, mirroring functions seen in the SWIFT messaging network.

Key Functions and Gas Considerations

Recibo comes with four base routing transaction operations with messages: permitAndTransferFromWithMsg, permitWithMsg, transferFromWithMsg, and transferWithAuthorizationWithMsg. All four allow for sending of coins with supporting encrypted messages, providing added security and transparency in payments.

But at a cost, these new capabilities don’t come cheap. With Recibo, a transaction will pay approximately 10,000 gas, in addition to a minimum transaction fee. For larger messages, an additional 560 will be tacked on for every 100 bytes of message payload. Overhead, but an inexpensive one in comparison to off-chain architectures, at least for most messages.

Security and Flexibility

Recibo is secure and adaptable in its configuration. It can have its encoding and encodings supported for a variety of use cases, including supporting custodial wallets and adaptability in terms of cryptocurrencies. The scheme also identifies both the real receiver and originator of the encrypted messages, even in case of transactions between exchange wallets, seeming to them to have taken place between them.

However, Recibo comes with a caveat: it hasn’t been audited and is only published under an Apache 2.0 license for educational use. Users have been advised not to store sensitive information directly onto the public blockchain, even in an encrypted form, for key leak concerns. To mitigate this, Recibo suggests storing sensitive information off-chain and accessing it through revokable tokens.

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