Visa is exploring an innovative solution for paying transaction fees on the Ethereum blockchain (ETH). Using a smart contract called Paymaster, users would be able to pay their transaction fees directly with their Visa card, avoiding the need to buy Ether to cover transaction costs. A solution successfully implemented on Goerli, soon on the mainnet?
Visa is tackling a major problem on Ethereum
What if soon you didn’t have to constantly wonder if you had enough crypto saved up to pay your transaction fees? Visa, the payment solutions giant, is currently testing an innovative solution for paying on-chain transaction fees directly with a Visa card.
This solution is aimed specifically at the Ethereum (ETH) blockchain, where transaction fees are currently a major problem, to the extent that this has contributed to the emergence of certain layers 2 seeking to resolve this scalability issue.
Currently, an Ethereum user has to buy Ether to settle his transactions, but given the fluctuations in gas, he has to make sure he keeps enough ETH aside to carry out his activities. Well, thanks to the account abstraction of the ERC-4337 standard, Visa wants to solve this problem with a very unique solution.
Diagram of a transaction using Visa’s Paymaster solution
This solution, which has already been successfully tested on the Ethereum Goerli testnet, could greatly simplify the user experience on the blockchain, as confirmed by Visa in its press release:
“Our experiment aims to offer a promising approach to the challenges of blockchain-based transactions “
How does it work
To bring this solution to fruition, Visa relied on the use of a Paymaster smart contract, a kind of DM dedicated to settling a user’s transaction fees on the Ethereum blockchain. As part of a transaction on a decentralised finance protocol (DeFi), for example, a user could choose to use their Visa card directly thanks to this when they have to pay their transaction fees.
Simplified diagram of a Paymaster transaction
According to Visa, everything is done behind the scenes without the user having to perform any technical operations:
“The role of a Paymaster is to abstract the complexities of the fee mechanism while offering alternative means of funding fees. Our experimental implementation solves this by accepting payment of the user’s gas fees off-chain from a Visa card and covering the equivalent amount on-chain, in the user’s name. “
The Paymaster smart contract is itself dependent on a Verifying Paymaster, a smart contract that allows the verification of transaction data and information to be delegated to an off-chain entity in order to ensure that the transaction in question runs smoothly. This information is transmitted in fully encrypted form with a digital signature.
According to the Visa press release, this solution could already be implemented by blockchain developers using the existing payment infrastructure. This solution could also be integrated into wallets in the future, which could further simplify the user’s transaction process.
