- Visa pioneers crypto solutions for on-chain gas fees, aiming for user convenience via direct card payments.
- Experiment eases Ethereum gas fee issues, using “Paymaster” smart contract and Visa’s novel approach.
- Visa’s crypto trial bridges the gap between traditional finance and blockchain, potentially expanding crypto adoption.
International leader in payment solutions, Visa is taking daring strides in the realm of cryptos by embarking on an inventive experiment, reported Forbes earlier today. The firm is currently testing a groundbreaking solution that has the potential to transform the way users handle on-chain gas fees – a frequent source of frustration in crypto transactions. By enabling users to pay these fees directly with their Visa cards, the company aims to simplify the user experience and introduce an entirely new level of convenience.
This experiment effectively addresses a significant challenge faced by crypto users, especially when dealing with Ethereum (ETH). The challenge revolves around adeptly managing Ethereum balances to accommodate the fluctuating gas fees. In the traditional Ethereum transaction process, users usually obtain ETH from exchanges or on-ramp services and then transfer it to their wallets to cover the variable gas fees. However, this procedure can be unwieldy and often leads to overspending or insufficient ETH holdings, creating complexities for users.
Employing Ethereum’s ERC-4337 standard, Visa’s inventive solution revolves around the introduction of a distinct “Paymaster” smart contract. This creative off-chain strategy for settling gas fees comes into play when a user initiates an Ethereum transaction from their personal wallet. At this point, the transaction takes a detour to reach the Paymaster, which is a specialized smart contract account established for this purpose.
Within the realm of the Paymaster, a precise calculation of the gas fee takes place, and the responsibility for this fee lies with Visa, which is billed through a web service called Cybersource. Once a digital signature undergoes validation, it becomes attached to the transaction. Subsequently, this transaction, along with its appended signature, gets transmitted to the Ethereum network. The Paymaster then undertakes a further verification of the signature’s authenticity, thus culminating in the seamless completion of the gas fee payment process.
The ramifications of this trial extend well beyond individual users. It opens up avenues for merchants and decentralized applications to enrich customer interactions by incorporating Visa card-based payments for gas fees. Additionally, providers of wallets and Paymasters could capitalize on this opportunity by integrating Visa card payment alternatives for covering gas fees. This move would not only heighten the accessibility but also bolster the uptake of cryptocurrencies.
Should Visa’s trailblazing endeavor yield success, it could signify a notable stride towards rendering crypto transactions more streamlined, user-focused, and within reach. By simplifying the process of gas fee payments, Visa’s experiment could play a pivotal role in bridging the divide between conventional financial transactions and the realm of blockchain technology. This, in turn, would contribute to driving the wider acceptance of crypto and services rooted in blockchain.
Back on April 24, Cuy Sheffield, Visa’s Crypto Head, hinted about a crypto project the company was working on According to Sheffield’s tweet, Visa’s imminent crypto offering is intricately designed to propel the widespread acceptance of public blockchain networks and transactions involving stablecoin.
Visa’s debut into the crypto landscape was via a partnership with Circle, a blockchain services company, with the aim of enabling transactions involving the USD Coin (USDC) stablecoin to be compatible with specific credit cards.
As reported by Forbes, Sheffield noted,
“This will be the first, corporate card that will allow businesses to be able to spend a balance of USDC.”
Cuy Sheffield, Visa’s Crypto Head
