Payments giant Visa is exploring the possibility of allowing users to pay transaction fees on leading smart contract platform Ethereum (ETH) with a card.
At a new company blog postthe credit card titan says that paying gas fees with a card can simplify the process of transactions over Ethereum.
According to Visa, users are currently required to use ETH and ETH only to pay Ethereum’s gas fees, which often leads to complex transactions. However, Visa says using a card to pay Ethereum’s gas fees would reduce the steps required to complete transactions.
“One of the biggest obstacles in the crypto world is the complex process of paying for transactions or operations on blockchains. Every operation, whether it’s a simple token transfer or a more complicated interaction with a smart contract, incurs a cost known as a “gas” fee. This represents the computational power required to perform the operation. In the case of Ethereum, this gas fee must be paid in the blockchain’s own token, ETH.
Despite the availability of stablecoins like USDC for transacting, users are still required to maintain a separate ETH balance to cover gas costs 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 buy ETH on a centralized crypto exchange and then transfer it to their wallets.
However, both strategies require additional steps and lack the simplicity and immediacy that users have come to expect from traditional financial transactions. In addition, these methods expose users to the volatility of crypto exchange rates as they must consistently buy ETH even when another cryptocurrency or stablecoin is used for the payment transaction.
According to Visa, three of its divisions have teamed up to create a way for users to use a card with fiat currency to pay for Ethereum’s gas costs.
“The result of this collaborative effort is a proposed solution flow that demonstrates how users can pay their on-chain gas costs in fiat money via an on-demand card. This proposed solution uses Ethereum’s ERC-4337 standard and a paymaster contract, allowing Visa cardholders to cover their gas costs directly.
We believe this innovative and adaptable approach can help streamline the onboarding process for new crypto users and improve the experience for current users.”
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