Visa, a global leader in payment solutions, is taking bold steps in the world of cryptos by embarking on an innovative experiment. The company is testing a groundbreaking solution that could revolutionise how users pay on-chain gas fees - a common pain point in crypto transactions. By enabling users to pay these fees using their Visa cards directly, Visa aims to simplify the user experience and introduce a new level of convenience.
The experiment addresses crypto users' significant challenge of managing Ethereum (ETH) balances to cover fluctuating gas fees. Traditional Ethereum transactions involve users acquiring ETH from exchanges or on-ramp services and transferring it to their wallets to cover variable gas fees. This process can be cumbersome and lead to overspending or insufficient ETH holdings, creating user complexities.
Visa's innovative solution involves leveraging Ethereum's ERC-4337 standard and introducing a unique "Paymaster" smart contract. This off-chain approach to gas fee settlement begins when a user initiates an Ethereum transaction from their wallet. The transaction is routed to the Paymaster, a specialised smart contract account.
The Paymaster calculates the exact gas fee, and Visa is charged for this fee through a web service called Cybersource. After validating a digital signature, the wallet attaches it to the transaction, which is then sent to the Ethereum network. The Paymaster further verifies the signature and completes the gas fee payment process.
The implications of this experiment extend beyond individual users. It allows merchants and decentralised applications to enhance customer interactions through Visa card based gas fee payments. Moreover, wallet and Paymaster providers could seize the opportunity to integrate Visa card payment options for gas fees, further expanding the accessibility and adoption of cryptos.
If Visa's pioneering effort proves successful, it could mark a significant step forward in making crypto transactions more seamless, user-centric, and accessible. By simplifying the process of paying gas fees, Visa's experiment could help bridge the gap between traditional financial transactions and the world of blockchain technology, ultimately propelling the broader adoption of crypto and blockchain-based services.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash