Visa is making significant strides toward making blockchain transactions more simple. The payment giant has been working on an experimental solution that allows for the payment of on-chain gas fees with a Visa card, which could be a game changer for users.
Visa significant strides
VISA product manager Mustafa Bedawala shared the publication while discussing a perceived issue with crypto wallets: the constant need to manage ETH balances for gas fees.
To use Ethereum, users must first purchase ETH on an exchange or through an on-ramp service, then transfer ETH to their wallets to ensure adequate coverage for fluctuating gas fees.
Because of the constant fluctuation of gas prices, users frequently overpay or fall short of their ETH supply, adding another layer of complexity and friction.
Gas fee payments via Visa Card
- Visa’s proposed solution makes use of Ethereum’s ERC-4337 account abstraction standard as well as a feature known as the “paymaster” smart contract, which allows for off-chain gas fee payments. The following is how the process is supposed to work:
- An Ethereum transaction is initiated by a user through their wallet, which then sends the transaction details to the paymaster web service.
- The web service computes the cost of the gas fee and then charges the user’s Visa card to process the card payment through Visa’s Cybersource system.
- Following that, the web service returns to the wallet a digital signature, approving the payment. This approval is only valid for a limited time.
- This signature is attached to the transaction by the wallet and forwarded to Ethereum.
- The paymaster smart contract then validates the signature and pays the gas cost to complete the transaction.
This sequence of steps enables the user to directly pay gas fees with their Visa card off-chain, removing the need for users to hold ETH solely for fee payment. This strategy greatly simplifies the user experience, making transactions easier.
Visa tested this concept on the Ethereum Goerli testnet, using open-source tools such as Stackup’s userop.js library. The test transactions were successful in covering fees without the use of ETH.
This concept, in particular, has enormous potential to reduce friction for blockchain users. The use of paymaster solutions by wallet providers or merchants may enable users to pay for gas using Visa cards.
Bedawala also hinted at broader implications, saying that merchants or dApps could use the paymaster setup to improve the customer experience, such as allowing Visa card payments for gas fees.
This solution may also pave the way for existing wallet and paymaster providers to offer Visa card payment options for gas fees.
To read our blog on “PayPal has finally released a stablecoin backed by US dollars,” click here
