Visa is moving to close a payments loophole tied to meme coin purchases. According to a source familiar with the matter cited by Crypto In America, checkout flows powered by crypto payments infrastructure firm Crossmint had allowed some meme coin purchases made with Visa credit cards to be processed under a merchant code intended for ordinary digital media.
The change comes in the same week that the Clarity Act failed to advance in the Senate. Banks had sought tighter restrictions on stablecoin rewards and came away without that result, but JPMorgan appears to have won a narrower fight over credit card rewards on crypto purchases, according to the report.
Investigation focused attention on how the purchases were coded
The Block previously reported that users of the Robinhood Wallet and Fomo apps could buy meme coins with credit cards through Apple Pay or Google Pay without completing a separate KYC process. In test purchases conducted by The Block, with Crossmint powering the transactions and both Visa and Mastercard credit cards used, the charges were coded as “digital goods media” rather than as crypto transactions.
That category is typically used for e-books, movies, and music. Because of that classification, customers were able to receive ordinary credit card rewards, including points or cash back, on meme coin purchases.
Chase challenged the classification
Chase told The Block that one Visa transaction had not been flagged as a cryptocurrency purchase, had been assigned the wrong merchant category code, and should not have earned rewards. The bank later opened a case with Visa over the classification.
The New York attorney general’s office also told The Block that it was aware of the issue and was reviewing it.
Crossmint cited SEC staff language, but Visa rejected the coding approach
Crossmint defended its approach by pointing to a 2025 U.S. Securities and Exchange Commission staff statement that described certain meme coins as akin to collectibles rather than securities.
Visa, however, has taken a different view on payment processing. In correspondence reviewed by Crypto In America, the company told at least one industry participant that the merchant code used for digital goods media is not appropriate for meme coin purchases.
Processors have been told the code will no longer be accepted
The source said Visa has informed payment processors, including Checkout.com, that the code will no longer be accepted for those transactions. Processors were 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.
Meme coin purchases remain, but rewards likely do not
The purchases themselves are not going away, according to the report. What is likely ending is the ability to earn standard credit card rewards on them. Going forward, those 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 said.
Crypto In America is a newsletter written by Eleanor Terrett, as noted in the report.