Paying fees for transactions on the Ethereum blockchain is too complicated for most people.
The payments company said blockchain technology could “shape the future of money movement” and has gained significant adoption in the past few years. However, facilitating transactions on-chain remains too complex for most users.
Every time a user conducts a transaction on Ethereum, he or she must pay a gas fee. That includes sending and receiving ether (ETH), the native cryptocurrency of the Ethereum blockchain, over the blockchain. Managing a user's ETH balance to cover those costs is “burdensome,” Visa said in the blog post. Eliminating the complexity could make blockchain-based transactions more accessible and user-friendly, Visa added.
“When comparing the complex nature of blockchain transactions with the simplicity of fiat-based payment transactions supported by the Visa network, it becomes evident that improvement is needed,” Visa said.
To bridge the gap, Visa suggests leveraging Ethereum’s ERC-4337, the current standard that enables smart contracts on the blockchain to serve as wallets via a process called "account abstraction," and a paymaster contract — a smart-contract account that can sponsor gas fees on behalf of the user. The service would allow users to use a Visa card to pay directly for gas fees.
Testing of this process was performed on the Ethereum Goerli "testnet," a test network for Ethereum.
Visa said merchants or decentralized applications could run their paymaster system or use an existing wallet to make transactions easier. The paymaster service providers could also offer a choice of card-based gas fee payment, among other options.
The payments company has been active in the crypto sector for a while, experimenting with different projects. In February, Visa looked into how to convert digital assets into fiat payments.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.