Payments giant Visa is exploring the possibility of allowing users to pay transaction fees on the leading smart contract platform Ethereum (ETH) using a card.
In a new company blog post, the credit card titan says that paying gas fees using a card may simplify the process of transacting over Ethereum.
According to Visa, users currently must use ETH and ETH only to pay for Ethereum’s gas fees, which tends to lead to complex transactions. However, Visa says that using a card to pay Ethereum’s gas fees would reduce the steps needed to complete transactions.
“One of the major obstacles in the world of crypto is the complex process of paying for transactions or operations on blockchains. Each operation, whether it’s a simple token transfer or a more intricate interaction with a smart contract, incurs a cost known as a ‘gas’ fee. This represents the computational effort required to execute the operation. In the case of Ethereum, this gas fee must be paid in the blockchain’s native token, ETH.
Despite the availability of stablecoins like USDC for conducting transactions, users are still required to maintain a separate balance of ETH to cover the gas fees on Ethereum. This often leads users to adopt complex and sometimes expensive methods. Some rely on on-ramp services to convert fiat currencies into native tokens like ETH, while others purchase ETH on a centralized crypto exchange and then transfer it to their wallet.
However, both of these strategies require additional steps and lack the simplicity and immediacy that users are accustomed to in traditional financial transactions. Furthermore, these methods expose users to the volatility of crypto exchange rates because they need to consistently purchase ETH even when a different cryptocurrency or stablecoin is being used for the payment transaction.”
According to Visa, three of its departments have collaborated to create a way where users could use a card loaded with fiat currency to pay for Ethereum’s gas fees.
“The result of this collaborative effort is a proposed solution flow that demonstrates how to enable users to pay their on-chain gas fees in fiat money through a card on file. This proposed solution utilizes Ethereum’s ERC-4337 standard and a paymaster contract, allowing Visa cardholders to directly cover their gas fees.
We believe that this innovative and adaptable approach can help streamline the onboarding process for new crypto users and improve the experience for current users.”Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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