Visa Blocks Use of Digital Media Codes to Buy Meme Coins for Rewards
According to insiders, Visa is fixing a loophole that allowed users to earn regular points or cashback when purchasing meme tokens with credit cards via crossmint. These transactions were categorized under merchant category code 5815, which is for digital media such as e-books, movies, and music, instead of the 6012 or 6051 codes that should be used for crypto assets, thus being recorded as regular consumer spending by issuing banks.
The loophole was first tested by The Block: users of Robinhood Wallet and FOMO could buy tokens like WIF using Visa or Mastercard through Apple Pay or Google Pay without separate identity verification at checkout, still earning points. JPMorgan Chase complained to Visa about the misclassification, asserting that points should not be awarded; after review, Visa confirmed at least one misclassified transaction. The New York Attorney General's office is also examining this pathway.
Crossmint treats meme coins as "digital collectibles" and claims the classification is reasonable; its checkout product distinguishes meme coins from stablecoins and security tokens, only allowing approved secondary meme coins. Visa's rules specify that the sale of quasi-cash and crypto assets must use codes 6012 or 6051 and include special conditions for crypto, which typically do not earn regular consumer points.
After the fix, meme coin purchases via crossmint will be treated as crypto transactions, subject to Visa's restrictions on crypto. Reports indicate that Visa has informed processors that this category does not apply to meme coins, and channels including checkout.com will stop accepting this coding, with a grace period expected to end this week.
This means for users: using cards to buy meme coins will lose the same cashback as buying movies and may trigger issuing banks to refuse payments for crypto transactions, impose high fees, or outright reject them. For wallets and checkout intermediaries, the window to package tokens as digital goods to bypass quasi-cash rules is tightening.
Mechanically, this is a withdrawal of subsidies by issuing banks: selling points for "turning volatile assets into e-book purchases" is arbitrage, while buying is the real refusal and fees after compliant classification. Funds are flowing back from reward points to the cost items of issuing banks; the beneficiaries are banks unwilling to subsidize high-volatility tokens, while the pressured parties are meme coin gateways relying on KYC-free card channels and cashback to attract new users.
The closure of the points loophole does not change the on-chain transactions themselves, only how fiat deposits are accounted for.
Source: Public Information
ABAB AI Insight
To use credit cards for meme coins, they must first pretend not to be money in the merchant code. Code 5815 categorizes purchases as media files, allowing issuing banks to treat them as movie purchases; code 6051 categorizes them as quasi-cash, immediately halting the points rules. Crossmint chose the former, using compliance interpretation to exploit network rules: collectibles can be images or resellable fungible tokens. Chase sent a transaction back to Visa, indicating that banks are preemptively shutting down subsidies ahead of regulators.
The capital pathway is: wallets integrate with Apple Pay, checkout companies choose codes, and points are issued by banks. When arbitrage exists, users effectively leverage the bank's marketing budget to buy volatile assets; once the code is reverted to crypto, the entry remains, subsidies disappear, and conversion rates fall back to regular deposits. New York's involvement indicates that the dispute has shifted from network rules to consumer protection: whether KYC-free card channels disguise high-risk assets as everyday consumption.
Similar precedents include cashing out with gift card codes and marking crypto deposits as software subscriptions. The payment industry is in a control phase: stablecoin cards can be issued, but meme coins can no longer enjoy movie points. Pricing power shifts back from the checkout intermediaries to the card organization manuals.
This falls under the regulatory change of reclaiming classification authority. The mechanism is that the rewards system only recognizes merchant codes, not on-chain assets; whoever can change the code can decide whether banks will bear the cost of speculation. When the manual is enforced, the narrative of collectibles cannot cover quasi-cash.
ABAB News · Cognitive Law
Points recognize merchant codes, not on-chain narratives
Assets that can be bought as movies will eventually be reverted to quasi-cash
Once bank subsidies are cut, the entry remains, but leverage is gone