TheBlock
Visa is moving to stop crypto payment processors from classifying memecoin purchases as digital media, a loophole that let users buy tokens with credit cards while earning ordinary points or cash back. The change follows scrutiny of Crossmint's checkout service, which powers memecoin purchases on Fomo and Robinhood Wallet. Visa has given processors a grace period expected to end next week.
Why it matters
The purchases were processed under merchant category code 5815, normally used for digital media such as streaming movies or audiobooks. The transactions also lacked special indicators showing that they involved crypto assets. Once the grace period ends, processors will have to classify the purchases as typical cryptocurrency transactions subject to Visa's restrictions.
Crossmint said it viewed the digital media classification as appropriate because some memecoins can be treated like collectibles under SEC guidance. Payments experts told The Block that securities-related opinions do not typically determine card-network classifications. Crossmint also removed GENIUS and DEGEN from its Apple Pay checkout after questions about whether the tokens fit its own memecoin guidance.
Market impact
For users, the immediate effect is the loss of ordinary card rewards on eligible memecoin purchases and potentially tighter access through Visa-linked payment routes. For processors, the shift adds compliance requirements and could make speculative token purchases less convenient to fund with cards.
Chase had already said it considered the classification inappropriate and referred the matter to Visa. New York Attorney General Letitia James' office said it was looking into Crossmint's product. Mastercard has not publicly disclosed whether it issued similar instructions, leaving payment processors across both networks facing a clearer compliance line for crypto purchases.
Frequently asked questions
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What loophole is Visa moving to close?
Visa is moving to stop processors from classifying memecoin purchases as digital media. That classification let users earn ordinary credit-card points or cash back on the purchases.
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What merchant category code was used for the purchases?
The transactions used MCC 5815, a category generally intended for digital media such as streaming movies or audiobooks. They also lacked indicators identifying them as crypto transactions.
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When is Visa's grace period expected to end?
Visa has given payment processors a grace period expected to end next week. Afterward, the purchases will need to use typical cryptocurrency classifications subject to Visa's restrictions.
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Which companies and apps are connected to the issue?
Crossmint powered the checkout service used for memecoin purchases on Fomo and Robinhood Wallet. Checkout.com was also identified as the payment processor involved in the classification.
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What happened to GENIUS and DEGEN?
GENIUS and DEGEN were made unavailable through Crossmint's Apple Pay checkout after questions about whether they fit the firm's memecoin classification guidance.
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