Payment solutions provider Visa is testing a new solution for users to pay gas fees on-chain with Visa cards in a potentially transformative effort.
In a new report, Mustafa Bedawala, product manager at Visa, explains that one challenge in cryptocurrency wallets is the constant need to manage ETH (Ethereum) balances to cover gas fees.
Standard Ethereum process is for users to obtain ETH from exchanges or OnRamp services and transfer it to a wallet to cover fluctuating gas fees. This constant adjustment of gas prices often causes users to either overpay or be locked out of ETH, creating complications and challenges.
Visa’s solution leverages Ethereum’s ERC-4337 standard and “Paymaster” smart contracts to enable off-chain gas fee payments. The process involves a user initiating an Ethereum transaction through a wallet and sending it to Paymaster. The web service then calculates the gas charge and bills Visa through CyberSource. A digital signature is then provided, which is linked to the wallet and sent to Ethereum. Paymaster verifies signatures and covers gas charges.
This series of steps will allow users to pay off-chain gas fees directly using their Visa cards, eliminating the need to hold ETH just to pay for fees.
According to Visa’s announcement, the company is testing the concept on Ethereum’s Goerly testnet, leveraging open-source tools such as StackUp’s userop.js library. The test transaction effectively covered fees through Paymaster, avoiding the need for ETH.
The concept has the potential to reduce friction for blockchain users. The report also suggests a wider impact, adding that decentralized applications could leverage the Paymaster framework to improve customer interactions and facilitate gas fee payments using Visa cards.
Translation/Editing Cointelegraph Japan