Visa, a global leader in payment solutions, is piloting a revolutionary system allowing users to handle on-chain gas fees using their Visa cards.
The Challenge: Ethereum Gas Fees
The Product Manager at Visa, Mustafa Bedawala, recently unveiled this novel approach. He pointed to a persistent hurdle cryptocurrency wallet holders face: the continuous monitoring and adjustment of Ether balances for gas fee payments.
In the conventional Ethereum mechanism, users buy ETH via an exchange service. Afterward, they transfer these to their wallets to address fluctuating gas charges. Such routine adjustments often result in users overcommitting funds or insufficient ETH. This practice creates complexity and poses challenges.
Visa’s Cutting-Edge Gas Fees Solution
Visa’s pioneering method harnesses the power of Ethereum’s ERC-4337 protocol in tandem with the “Paymaster” smart contract, facilitating off-chain gas fee resolutions. Here’s how it works:
- Initiating the Transaction: A user activates an Ethereum transaction using their wallet, which is directed to the Paymaster.
- Calculation and Charging: The online platform calculates the necessary gas fee and bills Visa through Cybersource.
- Digital Validation: Immediately after, a digital endorsement is generated, promptly verified, and attached by the user’s wallet, which then gets forwarded to Ethereum.
- Paymaster’s Role: The Paymaster checks this digital approval and handles the gas charge.
Such a streamlined process empowers users to pay their gas fees off-chain with their Visa cards conveniently. This eradicates the obligation for users to maintain ETH balances purely for fee payments.
Practical Application and Future Implications
Based on official sources, Visa has put this idea into practice on Ethereum’s Goerli testnet. They employed existing open-source instruments, including Stackup’s userop.js software. Test transactions adeptly handled fees via the Paymaster, bypassing the ETH mandate.
This method not only simplifies processes for blockchain enthusiasts but also negates the requirement of ETH stockpiling for mere fee settlements. The broader implications are substantial.
Merchants or decentralized apps could leverage the Paymaster infrastructure. Doing so enhances user engagement by allowing Visa card-based gas fee payments. Consequently, this could pave the way for existing wallet and Paymaster service providers to roll out Visa card-centric gas fee payment options.
Visa’s innovative approach could redefine how users interact with blockchain technology. Their approach makes the process more intuitive, efficient, and user-friendly.
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