coinspress.com
Visa, a prominent player in the payments industry, is actively exploring the potential of enabling users to settle transaction fees on Ethereum (ETH), the leading smart contract platform, using their payment cards.
In a recent publication on its official blog, the credit card giant highlights the prospect of utilizing payment cards to cover Ethereum gas fees as a means to simplify the intricacies of transacting on the Ethereum network.
At present, Ethereum users are exclusively required to employ ETH for bearing the gas fees associated with their transactions, resulting in a convoluted process. However, Visa proposes that integrating payment cards for these gas fees could significantly streamline the transaction process.
The realm of cryptocurrency encounters a notable challenge: the multifaceted nature of executing payments or operations on blockchains. Every action, from basic token transfers to complex engagements with smart contracts, incurs a “gas” fee, denoting the computational resources necessary for the task. In Ethereum’s case, this gas fee mandates payment in its native token, ETH.
In spite of the existence of stablecoins like USDC to facilitate transactions, users still find themselves obliged to maintain a distinct ETH balance to account for gas fees on the Ethereum network.
This often leads to the adoption of intricate and occasionally costly methods. Some rely on intermediary services to convert conventional currencies into native tokens such as ETH, while others purchase ETH on centralized cryptocurrency exchanges before transferring it to their wallets.
Regrettably, both these approaches introduce supplementary steps and lack the straightforwardness and immediacy inherent in conventional financial transactions. Additionally, these methods subject users to the fluctuations of cryptocurrency exchange rates, as the consistent procurement of ETH is necessary, even when an alternative cryptocurrency or stablecoin is employed for the actual payment.
READ MORE: PayPal’s PYUSD Set to Turbocharge Ethereum, According to Crypto Market Expert
Visa’s endeavor to address this comprises collaboration between three of its departments, aimed at devising a mechanism by which users could leverage their payment cards, loaded with conventional currency, to settle Ethereum’s gas fees.
The collaborative outcome materializes as a proposed solution, outlining how users can employ a card linked to their account to cover on-chain gas fees using fiat currency. This solution is based on Ethereum’s ERC-4337 standard and a designated paymaster contract, effectively granting Visa cardholders the direct capability to cover their gas fees.
The underlying belief is that this innovative and adaptable approach holds the potential to simplify the onboarding process for newcomers to the cryptocurrency realm and enhance the experience for existing users.