Crypto: Visa Cuts Rewards on Memecoin Purchases by Card

Visa will end a loophole that allowed certain memecoin purchases by card to generate loyalty points. The network has instructed its payment processors to stop using the relevant merchant code starting next week. However, purchases will still be possible by card, but without the associated rewards.

In Brief

• Some memecoin purchases were classified as digital goods and generated points.
• Chase reported the anomaly to Visa, while the New York District Attorney's office is examining the case.
• Card purchases should continue, but without points or cashback.

A Merchant Code Allowed Circumventing the Rules

The issue stems from a four-digit merchant code: 5815, which is normally used for digital books and movies. According to correspondence reviewed by Crypto in America, Visa has asked its processors to stop using it for memecoin purchases.

An investigation published on September 1 by The Block revealed that some dogwifhat (WIF) purchases could be processed as digital goods. As a result, the transactions triggered reward programs normally associated with this type of purchase.

The Block notably tested the purchase of WIF via Apple Pay and Google Pay on Fomo and Robinhood Wallet, using a Visa or Mastercard from New York. Crossmint, which provides the infrastructure used for these transactions, was involved in the process.

However, Visa's rules provide for different categories for direct cryptocurrency purchases, including codes 6012 and 6051, accompanied by a specific indicator. By using a different classification, the transaction could thus escape the usual processing reserved for crypto.

Chase Reports the Issue to Visa

Chase was one of the first banks to spot the anomaly. The bank confirmed to The Block that a transaction had not been identified as a crypto purchase and therefore should not have generated rewards.

Crossmint, for its part, defended its approach. The company considers some of the affected tokens as collectibles, relying in part on a statement from SEC staff dating back to 2025 regarding certain memecoins.

< < Every product we support goes through a detailed review with the relevant partners, including transaction categorization > >, a spokesperson assured.

The tightening follows three days after the failure of the CLARITY Act in the Senate, which left banks empty-handed on stablecoins. On cards, JPMorgan marks a tighter point, according to Crypto in America.

The case also interests the New York authorities. Attorney General Letitia James's office indicated to The Block that it is examining the situation.

Memecoins Will Remain Purchasable by Card

Visa's decision does not mean the end of memecoin purchases by credit card. Users will still be able to use this payment method, but transactions will now need to be correctly identified as cryptocurrency-related purchases.

For platforms like Fomo and players facilitating these payments, the disappearance of points could nonetheless reduce the appeal of this experience to new users.

Crossmint indicated in April that it had recorded 68,000 first-time buyers through its Apple Pay button, while Fomo raised $75 million in June for a valuation of $550 million.

For now, Visa is the only network to have announced a specific measure regarding this loophole. Mastercard has not announced a similar change. The future of the case will depend in part on the examination conducted in New York.

In the end, credit cards will continue to serve as a gateway to memecoins. What disappears is mainly the ability to turn a speculative purchase into a few extra loyalty points.