Visa explores blockchain to improve payment services
Financial services giant Visa is exploring blockchain technology to offer improved services for its “Auto Payments for Self-Custodial Wallets.” Using the technology, Visa seeks to implement the concept of Account Abstraction (AA) on public blockchains.
Visa looks at how the current AA paradigm on Ethereum through ERC-4337 offers creative solutions to deal with transaction fees, exploring options for users to pay Ethereum transaction fees with stablecoins, other ERC-20 tokens, or not having to pay them at all taken .
ERC-4337 is the current standard for AA implementation on Ethereum and a self-custodial wallet built as a smart contract that can offer functionality that allows an owner to directly own smart contract accounts.
Comparing Visa’s daily transactions, which are far higher than those on Ethereum, Visa commented that removing gas fees for users or allowing them to pay transaction fees in ERC-20 tokens are possible steps towards enabling blockchains to enjoy comparable levels of adoption. , especially if they support a similar breadth of payment experiences with the same degree of ease.
Visa claims that their new experiments with modes of service delivery challenge the blockchain approach by having to accumulate various native blockchain tokens solely to pay for gas. For Visa, travelers can spend in local currency without having to acquire it first.
Visa analyzed that the experimental Visa Paymaster contracts deployed on Ethereum’s Goerli Testnet can act as an intermediate currency conversion service. “The service may collect the digital currencies from the user and then convert them into native tokens based on the current exchange rate to pay for gas charges on the user’s behalf.”
Furthermore, Visa suggested that sponsoring transaction fees for users with ERC-4337 Paymaster may be possible, thus enabling a gas-free transaction.
According to Visa, “As blockchain technology continues to explore real-world applications, self-custodial wallets are becoming a popular choice for users to hold and trade their digital currencies.” Visa commented that frictionless crypto onboarding and transaction experiences must be enabled before digital currencies gain mainstream adoption.
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