In brief
- Visa is taking steps to address a loophole in Crossmint checkouts, where meme coin purchases via credit cards were incorrectly processed under a code intended for digital media.
- This action follows a dispute from Chase, which claimed that one transaction was misclassified and ineligible for rewards; the New York Attorney General’s office is also looking into the issue.
- Purchases of meme coins can still occur, but they now have to be categorized as cryptocurrency transactions in accordance with Visa’s regulations; processors have a grace period that is likely to conclude next week.
Banks were left disappointed when their attempts for stricter regulations on stablecoin rewards didn’t progress in the Senate, as the Clarity Act didn’t make it forward. However, JP Morgan achieved a small win in a different battle concerning credit card rewards on crypto purchases.
It appears Visa is moving to close an apparent loophole linked to Crossmint, a crypto payment service, as a source has revealed. This loophole allowed purchases of meme coins made with Visa cards to be processed as regular digital media.
The Block published an investigation indicating that users of the Robinhood Wallet and Fomo applications managed to buy meme coins using credit cards via Apple Pay or Google Pay without needing to go through standard verification processes. Test purchases made with Visa and Mastercard were categorized under “digital goods media,” typically reserved for e-books, music, and films, instead of being recognized as crypto transactions. Consequently, customers were able to access typical credit card rewards for their meme coin purchases.
Chase noted to The Block that one specific Visa transaction had been misclassified and should not have received rewards due to being assigned an incorrect merchant category code. They subsequently filed a case with Visa challenging this classification, and the New York Attorney General’s office acknowledged it is reviewing the situation.
Crossmint justified its approach by referring to a SEC staff statement from 2025, which likened some meme coins to collectibles rather than securities.
However, Visa does not seem to share that perspective when it comes to payment processing.
In communication reviewed by Crypto In America, Visa informed at least one industry participant that the merchant code intended for digital goods media is inappropriate for meme coin transactions.
Visa also notified payment facilitators, such as Checkout.com, that this particular code will no longer be valid for meme coin transactions, indicating the grace period to phase out this practice will end next week.
Neither Visa nor Crossmint responded to requests for comments promptly.
While meme coin purchases are not disappearing, the associated credit card rewards likely will. Going forward, these transactions must be processed as crypto transactions, adhering to Visa’s rules and limitations.
According to a source, “The message to the crypto industry is clear: Stop being cute, stay in your lane and use the appropriate codes.”
