All news is rigorously fact-checked and reviewed by leading blockchain experts and seasoned industry insiders.
- Visa Inc has created and tested a solution to enhance gas fees payment on Ethereum.
- The solution now implies users can pay for gas fees using Visa cards.
Global payment company Visa Inc has been working on an experimental solution that allows for the payment of on-chain gas fees with its credit card. According to the fintech company, the trial for this solution has now been completed opening up the room for users to utilize credit or debit cards to pay the gas fee directly with fiat on Ethereum (ETH).
For the trials, the Goerli testnet was adopted, and existing open-source tools such as Stackup’s userop.js library were employed.
It is worth noting that Visa has been seeking several means to diversify blockchain payment and so far, the payment firm has made giant strides in the area of introducing crypto-enabled debit and credit cards across 40 countries in the United Kingdom and Asia-Pacific (APAC).
Now, Visa’s technical team is designing the credit card payment solution for crypto gas fees through the paymaster contract, combined with account abstraction and ERC-4337. In a publication co-authored by Mustafa Bedawala, a product manager at VISA, Catherine Gu Head of CBDC & Protocols, Visa Crypto, and Mert Ozbay Technical Product Manager, Visa Crypto, the perceived problem with crypto wallets was described as the constant need to manage ETH balances for gas fees. A challenge Visa is now proferring solutions to.
For users to utilize ETH in Decentralized Finance (DeFi) space, they would be required to purchase the token from an exchange or through an on-ramp service. Thereafter, these ETH will need to be transferred to non-custodial wallets and users will need to make sure that there is sufficient coverage for fluctuating gas fees.
This whole process involving the constant shifting of gas fees causes users to overpay or fall short of their Ether supply, also adding a layer of complexity and friction.
Visa Brings Innovation to Gas Fee Settlement on Ethereum
With Visa’s “paymaster” smart contract, users can now initiate Ethereum transactions directly from their wallets.
Next, the transaction details are sent to the paymaster web service. The cost of the gas fee is then calculated by the web service and charged to the user’s Visa card using Visa’s Cybersource system to process the card payment. Afterward, the web service returns a digital signature to the wallet indicating that the transaction has been approved.
Markedly, the approval or digital signature is only valid for a scheduled period after which it would be invalidated. While the approval is still valid, the signature is attached to the transaction in the wallet and sent to ETH. In the end, the paymaster smart contract verifies the validity of the signature and covers the gas cost to process the transaction. This progression eliminates the need for users to hold ETH merely for paying fees, instead, the user is able to directly pay gas fees with their Visa card off-chain.
Ultimately, it greatly improves users’ experience by making their transactions more convenient. Bedawala also confirmed the broader implications of this latest innovation, noting that merchants or Decentralized Applications (dApps) could leverage the paymaster setup to enhance the customer experience, enabling gas fee payments with Visa cards.
