While buying meme coins with a credit card is possible, the loophole for earning cashback on those transactions has now been forcibly closed. Visa is blocking meme coin purchases that were previously processed under the “digital goods media” merchant category code - a classification meant strictly for sales of movies, music, or e-books.
The issue stems from the checkout system operated by Crossmint, a crypto payment infrastructure firm. The Block reported that users could buy meme coins via Apple Pay or Google Pay without undergoing a separate Know Your Customer (KYC) process. They simply used Visa and Mastercard cards to process transactions like regular retail purchases.
Because these purchases were categorized as digital media rather than crypto assets, cardholders enjoyed an extra perk. They were able to collect reward points and cashback on every meme coin purchased. Crossmint’s checkout service serves as the infrastructure powering Robinhood Wallet and the Fomo app.
Sparked by a Chase Complaint
Visa’s intervention began with a discovery by its banking partner. Chase reported a Visa transaction that bypassed crypto classification and was mistakenly assigned the wrong merchant category code. The bank promptly responded by opening an official case with the payment network.
In response to the findings, Visa informed at least one industry participant that the digital media label cannot be used for meme coin transactions. The merchant code misclassification has also caught the attention of law enforcement authorities. The New York Attorney General stated that their office is reviewing the matter.
A Narrow Win After Regulatory Failure
On the other side, Crossmint attempted to defend its approach. They pointed to a 2025 Securities and Exchange Commission (SEC) staff statement categorizing meme coins as collectibles rather than securities. However, that regulatory defense was rejected. Visa explicitly disagreed from a payment processing perspective.
For JP Morgan and its subsidiary Chase, the outcome represents a backdoor victory. The case emerged shortly after the draft CLARITY Act failed to pass in the Senate. That legislative failure left banks without the restrictions on stablecoin rewards they had sought. Now, despite losing in the legislative arena, they have secured a narrow win through Visa network restrictions.
Reported by Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
