Visa is closing a loophole that let meme coin purchases masquerade as digital media and earn credit card rewards. The move follows a challenge from Chase, which said one transaction was misclassified and shouldn’t have earned rewards. The New York attorney general’s office is also reviewing the matter.
Now that the code has been removed, the workaround that let meme coin purchases be made with Visa credit cards under a merchant code meant for ordinary digital media is finished.
How the loophole worked
Merchant codes issued by Visa inform banks about the nature of a purchase, and these codes are the basis for how rewards are assigned. A purchase coded as “digital goods media”, which is a category often applied to e-books, movies and music, qualifies for standard credit card rewards including points or cash back. This is the loophole.
Crossmint’s purchase codes were used to complete the test, which found that users of the Robinhood Wallet and Fomo apps could buy meme coins through Apple Pay or Google Pay using credit cards without going through a separate identity check. The test purchases were made using both Visa and Mastercard credit cards, and they appeared as “digital goods media”, not as crypto transactions. This coding let customers earn standard credit card rewards on the meme coin purchases.
The Block reported that Chase said one Visa transaction had not been marked as a cryptocurrency purchase, had been given the wrong merchant category code, and should not have earned rewards. After that, the bank opened a case with Visa to challenge how the transaction was classified.
The office of New York’s attorney general also told The Block that it was aware of the matter and reviewing it.
What Crossmint said
Crossmint cited a 2025 SEC staff statement that compared certain meme coins to collectibles rather than securities in defending its approach. Visa, however, disagrees with that characterization when it comes to payment processing.
The payment giant told at least one industry participant, through correspondence reviewed by Crypto In America, that the merchant code used for digital goods media is not appropriate for meme coin purchases. Visa has also informed payment processors, including Checkout.com, that the code will no longer be accepted for those transactions. The processors have been given a grace period to wind down the practice, which is expected to end next week.
Visa and Crossmint did not immediately respond to requests for comment.
The rewards are probably gone
Meme coin purchases aren’t going away. But the credit card rewards probably are. Going forward, the purchases must be processed as crypto transactions and will be subject to Visa’s corresponding rules and restrictions.
“The message to the crypto industry is clear: Stop being cute, stay in your lane and use the appropriate codes.”
The source stated that the correction follows Chase’s challenge to the classification, with the AG’s office currently examining it rather than preceding it.
A narrower victory
The Senate failed to advance the Clarity Act this week, and banks walked away without any new limits on stablecoin rewards. Instead, JP Morgan secured a narrower win in a separate struggle over credit card rewards tied to crypto purchases.
It is worth setting this contrast against the record. The push for the Clarity Act did not succeed. This Visa move did succeed, though only within the more limited bounds of merchant codes.
| Party | What they did | Outcome |
|---|---|---|
| Banks | Pushed the Clarity Act on stablecoin rewards | Failed to advance in the Senate |
| Chase | Challenged one misclassified transaction with Visa | JP Morgan’s narrower victory |
| Visa | Closed the merchant code loophole for Crossmint checkouts | Crypto rewards now coded as crypto transactions |
| New York AG’s office | Reviewing the matter | Still reviewing |
The Chase challenge was the trigger. Visa received a case from Chase over one transaction that had the wrong merchant category code, meaning it should not have earned rewards. The New York AG’s office is now reviewing the matter.
What this means for customers
Visa’s grace period for processors to stop the practice is ending next week. Once it ends, meme coin purchases made through Crossmint checkouts will be flagged as crypto transactions and treated under Visa’s rules.
That means customers may stop earning the same rewards they got before, because rewards on crypto purchases are subject to different rules than rewards on ordinary purchases.
The change shuts down the opening that allowed meme coin transactions to be presented as digital media. It simultaneously removes the rewards that those transactions previously carried.
The industry has been told plainly to stop with the charm and modesty, to stop playing the part of a humble observer, and to pick the right codes instead.
Now the question is whether the processors will comply before the grace period comes to an end. The loophole has been shut, but the practice itself still has to be stopped first.
Source material: “Visa Moves to Close Meme Coin Credit Card Rewards Loophole,” Decrypt.
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