Visa is working to close the memecoin credit card cashback loophole.

Visa goes to work closing the credit card classification loophole by buying memecoin

According to information obtained by crypto In America, Visa is taking action to close a loophole that allows users to circumvent the classification of crypto-transactions when purchasing memecoin with credit card . This change means that in future such purchases will be counted under the cryptocurrency transaction category and cardholders' space probabilities for earning ordinary credit card points or cashback are compressed.

The vulnerability originates from the Crossmint-supported checkout channel

The case comes from Crossmint, a crypto payment infrastructure company. Its checkout offerings previously allowed users to purchase memecoin using either the Apple Pay or Google Pay binding Visa or everything up to credit card via applications such as Robinhood , wallet and FOMO without having to complete the KYC identity verification process separately.

The Block's previous survey test found that such purchases were assigned to the merchant category code of a digital media commodity at settlement, which is typically used for goods like e-books, movies and music rather than crypto asset transactions. As such, users could receive credit or cashback rewards from card issuers as usual.

JPMorgan objects, regulators are concerned

JPMorgan told The Block that one of the Visa transactions was not labeled as a cryptocurrency purchase, had been misclassified and should not have generated an incentive, which it disputed with Visa. Meanwhile, the New York Attorney General's Office said it is aware of the matter and reviewing it.

Crossmint defended its practice, citing a statement issued by SEC staff in 2025 that treated Section memecoin as collectibles rather than securities.

But Visa clearly disagrees with this logic at the settlement level. According to people familiar, in a letter sent to at least one industry player, Visa made it clear that its digital media merchandise merchant code does not apply to memecoin purchases.

With the grace period approaching, purchases can still be made but rules are tightened.

Visa has notified payment processors such as Checkout.com that the merchant code will no longer be accepted for such transactions.

It should be noted that the memecoin purchases themselves will not stop, but in future they must be processed according to the cryptocurrency transaction and apply the corresponding rules and restrictions of Visa. As the sources say, the signal received by the industry is very clear: use the appropriate transaction category and no more rubber balls.

It's worth noting that while the banking Senate failed to make progress this week on the Clarity Act, which would have restricted stablecoin earnings, banks fell flat in that battlefield, but JPMorgan had a partial victory on the specific issue of crypto consumer rewards.

As of this writing, Visa and Crossmint have not responded to a request for comment.