The financial service giant Visa is exploring blockchain technology to provide enhanced services for its “Auto Payments for Self-Custodial Wallets.” Using the technology, Visa seeks to implement the concept of Account Abstraction (AA) on public blockchains.
Visa is looking at how the current AA paradigm on Ethereum through ERC-4337 offers creative solutions to dealing with transaction fees, exploring users’ options to pay Ethereum transaction fees with stablecoins, other ERC-20 tokens, or not have to pay them at all.
ERC-4337 is the current standard for AA implementation on Ethereum and a self-custodial wallet built as a smart contract that can offer functionalities that makes it possible for an owner to directly own smart contract accounts.
Comparing Visa’s daily transactions, which are way higher than those on Ethereum, Visa commented that removing gas fees for users or allowing them to pay transaction fees in ERC-20 tokens, are possible steps in the direction of enabling blockchains to enjoy comparable levels of adoption, especially if they support an equivalent breadth of payment experiences with the same level of ease.
Visa claims that its new experiments on modes of service provision challenge the blockchain approach in having to accumulate different native blockchain tokens solely for the purpose of paying for gas. For Visa, travelers can spend in local currency without having to acquire it first.
Visa analyzed that its deployed experimental Visa Paymaster contracts on Ethereum’s Goerli Testnet can act as an intermediary currency conversion service. “The service can collect the digital currencies from the user and then convert them into native tokens based on the current exchange rate to pay for gas fees on the user’s behalf.”
Moreover, Visa proposed that sponsoring transaction fees for users with ERC-4337 Paymaster can be possible, thus, enabling a gasless transaction.
According to Visa, “As blockchain technology continues to explore real-world applications, self-custodial wallets are becoming a popular choice for users to hold and transact with their digital currencies.” Visa commented that frictionless crypto onboarding and transaction experiences need to be enabled before digital currencies earn mainstream adoption.
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