Visa is closing a checkout loophole tied to meme coin purchases that had allowed some credit card transactions to be coded under merchant category codes used for digital media such as e-books, movies, and music. The setup was supported by crypto payments infrastructure company Crossmint. Visa has told payment processors, including Checkout.com, that the code can no longer be used for meme coin transactions and has given them a grace period to stop the practice, which is expected to end next week. After that, meme coin purchases will need to be processed as cryptocurrency transactions under Visa’s applicable rules. The issue drew scrutiny after Chase challenged a Visa transaction that was not labeled as a crypto purchase, arguing that the merchant category code was incorrect and that the purchase should not have earned credit card rewards. The New York Attorney General’s office is also aware of the matter and is reviewing it, according to Decrypt.
Visa is shutting down a checkout loophole supported by crypto payments infrastructure company Crossmint. The loophole had allowed users buying meme coins with credit cards to have those transactions classified under a merchant category code used for digital media purchases such as e-books, movies, and music.
Visa has notified payment processors, including Checkout.com, that it will no longer accept that code for meme coin transactions. The company has given processors a grace period to end the practice, and that window is expected to close next week. After that, meme coin purchases must be processed as cryptocurrency transactions and will be subject to Visa’s relevant rules.
Decrypt reported that Chase had disputed one Visa transaction that was not marked as a cryptocurrency purchase, arguing that its merchant category code was incorrect and that it should not have qualified for credit card rewards. The New York Attorney General’s office is also aware of the issue and is reviewing it.
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