In a groundbreaking move, Visa announced the successful testing of a mechanism that allows users to pay gas fees directly across the Ethereum chain using fiat through credit or debit cards. This experiment, conducted on the Ethereum Goerli testnet, could revolutionize the way users interact with the Ethereum blockchain, making it more accessible and user-friendly.
in blog mailVisa’s technical team stated, “Blockchain technology has gained significant adoption in recent years, and while it has the potential to shape the future of money movement, blockchain transactions result in a high level of complexity not seen in traditional payment methods.” They also outlined the challenges users face, particularly when it comes to managing ETH balances to cover gas fees.
Visa is improving the Ethereum Blockchain
Visa’s solution revolves around the concept of a payer contract. As described in their announcement, a chargeable is a “specialized type of smart contract account that can take care of gas fees for user contract accounts.” This innovative approach aims to free users from the need to hold native blockchain tokens solely for the purpose of covering gas fees.
“Our experience aims to provide a promising approach to address the challenges of large-scale blockchain-based transactions,” the Visa technical team wrote. “By leveraging the innovative payroll concept, combined with account abstraction and the ERC-4337 standard, we explored the possibility of a process that could redefine blockchain-based transactions.”
The implications of this development are enormous. Merchants or decentralized applications (dApps) can run their own payer solutions, enhancing user experience by accepting gas fee payments using Visa cards. Alternatively, existing wallet and payment administrator service providers may offer the option of card-based gas fee payment, further streamlining the transaction process for users.
Visa’s foray into the blockchain space is not new. Earlier this year, reports surfaced about the company experimenting with converting digital assets into fiat payments on the Ethereum blockchain. This has been seen as an attempt to reverse existing foreign exchange operations, in line with its broader vision of facilitating global settlements involving digital and traditional currencies.
It should be noted that gas fees play an important role in the Ethereum ecosystem. They represent the computational effort required to perform operations on the blockchain and act as a deterrent to malicious actors aiming to spam the network. However, with Visa’s new approach, the future may see a shift towards more user-friendly and perhaps even “no-gas” transactions.
Significantly, the news also shows that major tech and financial giants are choosing the Ethereum blockchain as their go-to platform. PayPal recently announced PYUSD on Ethereum. JP Morgan is also betting on Vitalik Buterin’s blockchain due to its investment in ConsenSys, Amazon and Microsoft Azure, among others.
At the time of publication, the Ether price did not react to the news and remained in a range between $1,822 and $1,882.
Featured image by CryptoNoticias, chart from TradingView.com