Visa to Restrict Digital Media Category for Memecoin Credit Card Purchases
Visa to close memecoin rewards loophole
Visa is moving to stop credit card purchases of memecoins from being treated as digital media, according to a report from the newsletter Crypto in America on Friday. This change would close a loophole that let people earn ordinary credit card points or cash back when buying memecoins.
The move follows an investigation by The Block into Crossmint, the company that processes credit card purchases of memecoins on the apps Fomo and Robinhood Wallet. The report says Visa told Checkout.com, Crossmint's payment processor, that the digital media category is no longer appropriate for memecoin purchases.
Key details from the report
- Memecoin purchases were categorized under merchant category code (MCC) 5815, typically used for digital media like streaming movies or audiobooks.
- These purchases lacked special flags that indicate crypto transactions.
- Visa has given processors a grace period that is expected to end next week.
- After the grace period, purchases will need to be processed as typical cryptocurrency transactions, which are subject to Visa's restrictions.
Crossmint's response
A Crossmint spokesperson told The Block that the company's procedures for processing digital goods have not changed. The spokesperson said Crossmint maintains good standing with Visa, Mastercard, and all payment partners, and that if guidance is updated, their procedures will be updated accordingly.
Crossmint previously told The Block it believed the digital media category was appropriate, citing SEC guidance that some memecoins can be considered collectibles. Payments experts told The Block that SEC opinions do not usually determine how purchases are categorized under card-network rules.
Other reactions
Chase told The Block it considered the category inappropriate and referred the matter to Visa. The New York Attorney General's office said it was aware of Crossmint's product and was looking into it.
Mastercard has not publicly said whether it will issue similar instructions to payment processors. Mastercard and Checkout.com did not immediately respond to requests for comment. Visa declined to comment on an earlier inquiry from The Block.
Some tokens removed from Apple Pay checkout
Some tokens offered through Crossmint appeared to stretch the definition of memecoins, such as GENIUS, the token of a trading platform with no apparent meme origin. After The Block asked about these tokens, GENIUS and DEGEN were made unavailable through Crossmint's Apple Pay checkout.
Crossmint's Head of Strategy, Fonz Olvera, previously told The Block that complying with regulation is important, but there is always tension between business and the law.
What is confirmed
Confirmed facts from the sources: Visa is moving to restrict the digital media category for memecoin purchases, according to Crypto in America. Crossmint's memecoin checkout remains live on both apps as of publication. Crossmint has not changed its procedures. Some tokens were removed from Apple Pay checkout.
What is still unclear
It is unclear whether Mastercard will follow Visa's lead. The exact end date of Visa's grace period is not confirmed. The source of the report is a single person familiar with the matter, so details are not independently confirmed.
Why it matters
If Visa enforces this change, credit card users may no longer earn points or cash back on memecoin purchases through these apps. It could also affect how crypto purchases are categorized and regulated in the future.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.