Visa Eyes Mass Adoption of Crypto by Testing On-Chain Gas Fee Payment Through Fiat

Visa has finalized the testing for a process that would allow users to pay the on-chain gas fees in fiat currency through card payments, the company wrote in a blog post on Thursday.

The payments giant 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 complex for mass users.

Especially gas fees, the cost of sending and receiving ether (ETH), the native cryptocurrency of the Ethereum blockchain, and the process of managing the user’s ETH balance to cover these additional costs is “burdensome,” Visa said in the blog post. Eliminating this complexity could make blockchain-based transactions more accessible and user-friendly, the blog 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. This service would allow users to use a Visa card to pay directly for gas fees.

The testing of this process was performed on the Ethereum Goerli testnet, a testing network for Ethereum.

Visa said merchants or decentralized applications (dapps) could run their paymaster solution or already existing wallet to make transactions easier. The paymaster service providers could also offer a choice of card-based gas fee payment, among other offerings.