Visa Moves to End Digital-Media Coding for Memecoin Purchases
Visa is moving to stop payment processors from classifying credit card purchases of memecoins as digital media, closing a payments loophole that allowed some buyers to earn standard credit card rewards on transactions that would ordinarily be treated as cryptocurrency purchases.
The change was reported Friday by Crypto in America, which said Visa informed at least one industry participant that the merchant category code being used for the transactions was not appropriate for memecoin purchases. Payment processors including Checkout.com have reportedly been told that the classification can no longer be used, with a grace period expected to expire next week.
The issue centers on Crossmint, the crypto payments infrastructure company that powers card-based token purchases inside Robinhood Wallet and social trading app Fomo. Crossmint’s checkout allows users to purchase supported tokens using credit or debit cards as well as Apple Pay and Google Pay.
The Block reported earlier this month that test purchases of dogwifhat, or WIF, through Robinhood Wallet and Fomo were processed under merchant category code 5815. That category is designed for digital goods such as electronically delivered books, movies, artwork and music.
The transactions also reportedly lacked the additional indicators normally used to tell card networks and issuing banks that the customer was acquiring cryptocurrency. As a result, the purchases were treated like ordinary retail transactions and qualified for standard card rewards such as points or cash back.
Visa’s own Merchant Data Standards Manual separates cryptocurrency acquisition from digital-media purchases and requires crypto transactions to be processed using the appropriate financial or crypto-related merchant coding and transaction indicators.
The dispute became more significant after Chase reviewed one of the transactions and told The Block that it believed the purchase had been assigned the wrong merchant category code. The bank said cryptocurrency purchases are not eligible for rewards under its program and referred the classification to Visa for review.
The New York Attorney General’s office also told the publication that it was aware of Crossmint’s product and was reviewing the matter.
Despite Visa’s reported intervention, Crossmint-powered memecoin purchases remained available through both Robinhood Wallet and Fomo at the time of The Block’s latest review. The expected change therefore appears to concern how the transactions are processed rather than an outright ban on card-funded memecoin purchases.
A Crossmint spokesperson said the company remains in good standing with Visa, Mastercard and its other payment partners and that its procedures for processing digital goods have not changed. The spokesperson added that Crossmint would update those procedures if network guidance changes.
The Dispute Comes Down to What a Memecoin Purchase Actually Is
Crossmint has previously argued that certain memecoins can reasonably be treated more like digital collectibles than conventional financial assets, pointing to a 2025 SEC staff statement that described some meme coins as comparable to collectibles and said they generally do not constitute securities under federal securities laws.
That argument created an unusual collision between two different classification systems. A token may fall outside securities regulation while still being considered cryptocurrency for payment-network purposes. Visa’s merchant rules determine how transactions move through its card network, independently of whether the SEC views an asset as a security.
The distinction matters because merchant category codes affect much more than the description appearing on a card statement. They can influence issuer approval rules, fraud controls, rewards eligibility, fees and the additional information that processors must transmit with a transaction.
Crossmint is not a marginal player in the effort to bring traditional payment rails into crypto. Earlier this year, the company also worked with Visa-linked payment infrastructure for AI agent transactions, showing how closely its business increasingly connects crypto-native systems with mainstream card networks.
Fomo has said Crossmint represents only one of several on-ramp options available to its users and accounts for roughly 7% of user inflows. That limits the immediate platform-level exposure if Crossmint’s card flow becomes less attractive, but the wider implications extend beyond one application.
Mastercard has not publicly disclosed whether it has issued similar instructions to payment processors. That leaves an important question over whether the two largest card networks will ultimately adopt the same treatment.
A Four-Digit Merchant Code Can Change the Economics of Crypto Checkout
The interesting part of this story is not really the credit card points.
It is friction.
Crypto companies have spent years trying to make the jump from a bank account or credit card into an on-chain asset feel like an ordinary consumer checkout. Apple Pay, saved cards and one-tap purchases are powerful because they remove the moment where a new user suddenly realizes that buying crypto involves a completely different financial workflow.
Crossmint has built much of its pitch around removing exactly that friction. If memecoin purchases have to move through standard crypto transaction categories, the checkout can still work, but the economics around it may change.
Rewards could disappear. Some issuers may treat transactions more conservatively. Fees or cash-like transaction treatment may vary depending on the card issuer. Approval rates could also change if banks apply additional controls to transactions clearly identified as crypto.
That does not mean card-funded memecoin buying disappears. It means the experience may become less indistinguishable from buying an audiobook or ordering food.
This matters at a time when the industry is moving rapidly in the opposite direction. Exchanges are building consumer payment products such as OKX Pay, while fintech firms are expanding stablecoin products deeper into everyday financial applications. Revolut, for example, has begun a stablecoin rollout across European markets.
The easier crypto becomes to access through familiar financial interfaces, the more important these invisible classification rules become. The front end might look like Apple Pay. Underneath it, issuers, networks, acquirers and processors still need to agree on what exactly is being purchased.
What Happens After Visa’s Grace Period Ends
The next test comes when the reported grace period expires.
If Crossmint simply recodes the transactions under Visa’s cryptocurrency rules while keeping the checkout available, users may notice relatively little until rewards, fees or approval behavior changes. That would make this primarily a payments-economics story rather than a distribution shock for Robinhood Wallet or Fomo.
A more important question is whether the change affects the low-friction design that made these checkout products attractive in the first place. Card networks have enormous leverage here because they do not need to prohibit a product to change its economics. They can simply require that the transaction identify itself correctly.
Mastercard’s response is also worth watching. If it follows Visa, payment processors would have little incentive to maintain separate classification approaches across the major networks. A common treatment would effectively close the route industry-wide.
For investors and crypto companies, the broader lesson is straightforward: putting an asset on-chain does not erase the rules of the payment system used to buy it.
Memecoins may sit in an unusual regulatory category, and some may resemble collectibles more than traditional investment products. But once a consumer pulls out a Visa card, payment-network rules become part of the product.
That is the real significance of Visa’s move. The battle over crypto adoption is increasingly shifting away from whether digital assets can connect to mainstream finance. They already can. The harder question now is what happens when mainstream financial infrastructure decides exactly how those transactions must behave.
Shane Neagle is a financial markets analyst and digital assets journalist specializing in cryptocurrencies, memecoins, prediction markets, and blockchain-based financial systems. His work focuses on market structure, incentive design, liquidity dynamics, and how speculative behavior emerges across decentralized platforms.
He closely covers emerging crypto narratives, including memecoin ecosystems, on-chain activity, and the role of prediction markets in pricing political, economic, and technological outcomes. His analysis examines how capital flows, trader psychology, and platform design interact to create rapid market cycles across Web3 environments.
Alongside digital assets, Shane follows broader fintech and online trading developments, particularly where traditional financial infrastructure intersects with blockchain technology. His research-driven approach emphasizes understanding why markets behave the way they do, rather than short-term price movements, helping readers navigate fast-evolving crypto and speculative markets with clearer context.