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by Mohammad Ali
In a potential game-changer, Visa, a global payment leader, is piloting an inventive approach allowing users to settle on-chain gas fees directly via Visa cards, signaling a step toward melding conventional finance with the decentralized domain.
News of this groundbreaking endeavor was unveiled by well-known crypto analyst Wu Blockchain on August 11th, 2023, marking a pivotal move towards harmonizing traditional financial systems with the rapidly evolving blockchain landscape.
Visa stated that it has completed the test of users using credit or debit cards to pay the gas fee directly with fiat on the Ethereum Goerli testnet. Visa’s technical team aims to provide a solution through the paymaster contract, combined with account abstraction and ERC-4337.…
— Wu Blockchain (@WuBlockchain) August 11, 2023
The product manager at Visa, Mustafa Bedawala, emphasized a notable hurdle related to cryptocurrency wallets. The persistent need to monitor Ethereum (ETH) balances for gas fee coverage has emerged as a significant challenge.
We’re excited to share our experimental solution on Paying Onchain Gas Fees with a Visa Card
At @Visa, we’ve been exploring ways to simplify blockchain transactions
Imagine paying for gas fees as easily as buying coffee with your card!
But how did we get here?
🧵👇 pic.twitter.com/uGhAde60xe
— Mustafa (@digitalmustafa) August 10, 2023
Traditionally, Ethereum users navigate fluctuating gas fees by acquiring ETH from exchanges or on-ramps, which often leads to inefficiencies and complications due to the volatile nature of gas prices.
Visa’s Off-Chain Solution And Innovation
According to a recent report, Visa’s trailblazing solution leverages Ethereum’s ERC-4337 standard and the ingenious “Paymaster” smart contract, introducing an off-chain gas fee settlement process. Users initiate an Ethereum transaction from their wallets, which is routed to the paymaster.
The paymaster calculates the gas fee and bills via Cybersource. After swift digital signature validation, the wallet attaches the signature before transmitting it to Ethereum. Paymaster verifies and covers the gas fee, enabling users to seamlessly pay gas fees via their cards off-chain, sparing them from the need to retain ETH exclusively for fee payments.
Visa’s innovative model underwent trials on the Ethereum Goerli testnet, employing readily available open-source tools, including Stackup’s userop.js library. Successful trial transactions validated the feasibility of fee coverage via the Paymaster, effectively eradicating the ETH requirement.
This revolutionary concept extends beyond user convenience. The framework could empower merchants and decentralized applications to streamline customer interactions, revolutionizing gas fee payments through cards. Furthermore, wallet and PayMaster providers could seize the opportunity to introduce Visa card-based gas fee payment options, marking a leap forward in blockchain usability.
In a space marked by constant evolution, Visa’s strides in off-chain gas fee payments set the stage for a more seamless and user-friendly blockchain experience, bridging the gap between traditional finance and the decentralized frontier.
Related Reading:| Visa Expands Crypto Payments Reach: Embracing Ethereum Account Abstraction