Visa is directing payment processors to stop routing meme coin purchases through merchant category code 5815, the code reserved for digital goods and media such as e-books and streaming subscriptions, closing a gap that let users of the Robinhood Wallet and Fomo apps earn ordinary credit card rewards, points and cash back, on crypto bought through Apple Pay or Google Pay. The grace period for processors to comply was expected to end the week of 21 September.
The Block first reported the loophole in early September, finding that processors including Checkout.com classified these purchases as digital media rather than cryptocurrency transactions. Chase subsequently flagged at least one such transaction as improperly coded and said it should not have earned rewards, and New York’s attorney general opened a review of the practice. Crossmint, the crypto payments infrastructure behind some of the affected flows, has not detailed how it will adjust its coding once Visa’s deadline lands.
The loophole did more than pay out undeserved rewards. Digital media transactions do not carry the same know-your-customer checks that crypto purchases require, so the misclassification let some buyers skip verification steps built for exactly this kind of transaction. Card networks quietly policing how crypto purchases get coded is a lever regulators have barely used so far, and this is one of the first visible cases of a network closing a gap on its own before a regulator forced the issue.
Visa has not said whether issuers will claw back rewards already paid out under the old coding, nor whether the fix also closes the KYC gap or only the rewards one. Robinhood and Fomo have not publicly responded to the change their users are about to feel.
