Visa is closing a loophole that allowed meme coin purchases to earn credit card rewards by reclassifying them from digital media.
Regulation & Gov ·
Visa is moving to close a workaround that allowed meme coin purchases made with credit cards to earn standard rewards. The payments giant has informed payment processors, including Checkout.com, that transactions in meme coins can no longer be coded under the merchant category for digital media—a classification typically used for e-books, movies, and music. The shift follows a challenge from Chase, which flagged a misclassified Visa transaction, and comes as New York's attorney general reviews the matter. Processors have been given a grace period expected to end next week to halt the practice.
The loophole emerged through Crossmint-powered checkouts that processed meme coin purchases under digital goods codes rather than cryptocurrency categories. Robinhood Wallet and Fomo users could buy meme coins via Apple Pay or Google Pay while earning ordinary credit card rewards without completing separate identity verification. Crossmint had defended the coding by citing a 2025 SEC staff statement characterizing certain meme coins as collectibles rather than securities, a distinction that did not persuade Visa's enforcement position.
Meme coin transactions will continue but must now be processed as crypto transactions subject to Visa's cryptocurrency rules and restrictions. The change represents a narrower regulatory victory for major banks following their failed push for stricter stablecoin rules through the Clarity Act. Whether the reclassification will significantly reduce purchase volumes or reward incentives remains to be seen as the industry adjusts to the new requirements.