Visa Moves to Close Memecoin Credit Card Rewards Loophole…

What Is Visa Changing for Memecoin Purchases? Visa is reportedly moving to stop payment processors from classifying memecoin purchases as digital media, closing a processing route that allowed some credit card users to earn ordinary points or cash back when buying crypto. Crypto in America reported Friday that Visa has informed industry participants that merchant category code 5815, which covers digital goods and media, is not appropriate for memecoin purchases. Payment processors have reportedly been given a grace period to change how the transactions are handled, with that period expected to end next week. The change directly affects a checkout system operated by crypto payments company Crossmint and used by Fomo and Robinhood Wallet. The transactions are processed through infrastructure that includes Checkout.com. FinanceFeeds reported earlier this month that some Crossmint-powered purchases were appearing on card statements under MCC 5815 rather than merchant categories normally associated with cryptocurrency. The Crossmint checkout remained available on both Fomo and Robinhood Wallet after the reported Visa instruction. The expected end of the grace period means the immediate issue is not whether the products can continue operating, but how the transactions will be categorized once processors have to treat them as crypto purchases. Why Did Merchant Code 5815 Matter? Merchant category codes determine how card networks and issuing banks identify transactions. MCC 5815 is generally associated with electronically delivered products such as digital books, movies, music and other media. Crypto purchases are treated differently. Visa's rules require direct cryptocurrency transactions to use crypto-related merchant categories and additional indicators identifying the transaction as involving digital assets. That distinction had a direct financial consequence for cardholders. Purchases processed as ordinary digital media could receive standard credit card rewards, while cryptocurrency and other cash-like transactions are commonly excluded from rewards programs. Chase previously challenged the treatment of at least one transaction, saying it believed the purchase had been assigned an inappropriate category and should not have earned rewards. The bank referred the matter to Visa. The New York Attorney General's office also said it was aware of the product and reviewing the issue. Crossmint has defended its approach. A company spokesperson said, "Crossmint maintains good standing with Visa, Mastercard, and all of our payment and card network partners." The spokesperson added that its procedures for processing digital goods had not changed and that the company would update them if relevant guidance changed. Investor Takeaway The issue is less about whether users can buy memecoins with cards than how those purchases move through the payment system. Reclassifying them as crypto transactions could eliminate ordinary card rewards and introduce the restrictions, fees and compliance controls normally attached to digital asset purchases. Does This Mean Visa Is Pulling Back From Crypto?