Visa is currently testing an innovative solution that could transform user experiences by enabling Visa card payments for on-chain gas fees. Mustafa Bedawala, a product manager at Visa, presented a report highlighting a challenge associated with cryptocurrency wallets: managing Ether balances to cover gas fees.
On Ethereum, the standard procedure requires users to obtain ETH from an exchange or on-ramp service and then transfer it to their wallets to handle variable gas fees. This constant adjustment of gas prices often forces users to overspend or have insufficient ETH, introducing complexities.
Similarly, Visa’s inventive approach utilizes Ethereum’s ERC-4337 standard and the “Paymaster” smart contract to enable off-chain gas fee settlement. In this process, users initiate an Ethereum transaction through their wallet, which is sent to the paymaster. The web service calculates the gas fee and charges Visa via Cybersource. Also, the wallet generates a digital signature, validates it, and appends it before sending it to Ethereum. The Paymaster verifies the signature and covers the gas fee.
This series of steps empowers users to use their Visa card to directly pay gas fees off-chain, eliminating the need to hold ETH solely for fee payments. Visa has already tested this concept on the Ethereum Goerli testnet using available open-source tools such as Stackup’s userop.js library. The trial transactions successfully covered fees through the Paymaster, removing the requirement for ETH.
However, this idea has the potential to reduce friction for blockchain users, allowing them to pay gas fees directly with a Visa card off-chain, erasing the need of holding ETH exclusively for fee payments.
The report also indicated broader implications, highlighting how merchants or decentralized applications could leverage the Paymaster framework to enhance customer interactions. This framework facilitates gas fee payments using Visa cards. In the same vein, the innovation could also prompt wallet and Paymaster providers to introduce options for Visa card-based gas fee payments.