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In a potentially groundbreaking development for users, Visa, the payment solutions provider, is experimenting with a novel approach that allows on-chain gas fees to be settled using a Visa card.
Mustafa Bedawala, a product manager at Visa, shared insights in the report, emphasizing a notable issue with cryptocurrency wallets: the persistent need to monitor Ether (ETH) balances to cover gas fees.
The typical Ethereum process requires users to obtain ETH from an exchange or on-ramp service and subsequently transfer it to their wallets to manage fluctuating gas fees. This constant adjustment of gas prices often results in users either overspending or lacking sufficient ETH, creating complexities and difficulties.
Visa’s groundbreaking solution utilizes Ethereum’s ERC-4337 standard along with the “Paymaster” smart contract, facilitating off-chain gas fee settlements. The procedure involves the user initiating an Ethereum transaction through their wallet, which is directed to the paymaster.
Image illustrating steps involved in paying gas fees with Visa card via Paymaster. Source: Visa
The web service calculates the gas fee and processes the charge through Cybersource. Following this, a digital signature is generated and briefly validated, then attached by the wallet before being dispatched to Ethereum. The Paymaster confirms the signature and pays the gas fee.
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This series of actions enables users to directly settle gas fees with their Visa card off-chain, removing the necessity for users to maintain ETH solely for fee payments.
As reported, Visa has tested this concept on the Ethereum Goerli testnet, employing available open-source resources, including Stackup’s userop.js library. The trial transactions successfully managed fees through the Paymaster, eliminating the need for ETH.
Related: 3 reasons why Ether price is still pinned below $1,900
Importantly, this concept has the potential to ease the experience for blockchain users and allows them to directly pay gas fees with their Visa card off-chain, negating the requirement to hold ETH just for fee payments.
The report also indicated broader implications, noting the potential for merchants or decentralized applications to leverage the Paymaster framework to enhance customer experiences, enabling gas fee payments via Visa cards. This innovation may also present opportunities for existing wallet and Paymaster providers to offer solutions for Visa card-based gas fee payments.
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