Visa Has Unveiled an Solution to Eliminate Gas Fees

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Last Updated on August 11, 2023 by Bitfinsider

Visa has launched an experimental solution on Ethereum that overcomes some of the restrictions to paying petrol fees on the network.

According to Visa, the experimental solution on Ethereum’s Goerli testnet optimises user-network interaction by combining account abstraction technology and the ERC-4337 standard. End users are no longer required to save ether (ETH), Ethereum’s native coin, for transaction or “gas” fees. Users must still pay a gas price, but the approach allows them to pay using any token, such as USDC or USDT, removing a layer of friction in Ethereum payments. Visa can also reimburse those costs.

Managing ETH balances for petrol fees might be difficult for some customers because they must transfer fiat money into ETH using a third-party onramp such as Coinbase or Moonpay. Due to fluctuating petrol prices, this could result in overpayment or underpayment. Visa’s research team identified this issue and presented this new approach as an effective way to solve these gas-related issues, with the innovation centred on enabling the wallet itself to cover gas prices.

A “paymaster” – a specialised smart contract – is the fundamental component of this system. According to Mustafa Bedawala, Visa’s staff product manager, this is not a new notion for Visa, since they have previously investigated this area. The paymaster acts as a sponsor for gas costs on user contract accounts, allowing users to pay onchain gas fees directly with their Visa card without having to deal with native blockchain tokens.

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