Visa moves to close loophole allowing credit card rewards on meme coin purchases

The issue came to light after an investigation found that users of Robinhood Wallet and Fomo apps could buy meme coins with credit cards via Apple Pay or Google Pay without a full Know Your Customer (KYC) process. These transactions were coded as 'digital goods media.'

Chase flagged one such Visa transaction, stating it was misclassified and should not have qualified for rewards. The bank subsequently initiated a challenge with Visa. The New York attorney general's office has also indicated it is aware of and reviewing the situation.

Crossmint defended its approach by referencing a 2025 SEC staff statement that characterized certain meme coins as akin to collectibles rather than securities. However, Visa appears to disagree with this classification for payment processing purposes. In correspondence reviewed by Crypto In America, Visa informed at least one industry participant that the digital goods media merchant code is inappropriate for meme coin purchases. Visa has also notified payment processors, including Checkout.com, that this code will no longer be accepted for such transactions. Processors have been granted a grace period, expected to conclude next week, to adjust their practices.

While meme coin purchases are expected to continue, the associated credit card rewards are likely to cease. Going forward, these transactions must be processed as crypto transactions, adhering to Visa's established rules and restrictions for such activities.