Certain Memecoin Purchases via Credit Card Earned Points and Cash Back: Chase Objects

While certain memecoin transactions made with credit cards on Fomo and Robinhood Wallet were coded as digital product purchases and earned rewards, Chase has objected to this classification.

Tests conducted by The Block using Visa and Mastercard cards revealed that WIF purchases were processed under the category used for digital content shopping instead of crypto transactions. Users also received standard card rewards such as points and cash back when paying via Apple Pay or Google Pay.

In the Fomo and Robinhood Wallet apps, buying Bitcoin or Ethereum typically requires a transfer from an external wallet or purchasing USDC with a debit card. However, for certain memecoins like WIF, users can make direct payments via credit card. The transactions take place through the payment product of crypto infrastructure company Crossmint, and no separate identity verification process is required.

Memecoin Purchases Processed with Digital Product Code

The tested transactions were recorded on Visa and Mastercard networks with the MCC 5815 code. This code covers products such as books, movies, music, and digital images provided in electronic format. Visa and Mastercard rules, however, mandate the use of different codes and specific indicators denoting crypto transactions for direct crypto purchases.

Chase stated that the Visa transaction was not flagged as a crypto purchase and was processed under the wrong category. The bank said it has opened an investigation file with Visa and that such transactions should not earn reward points. The New York Attorney General’s Office also announced that it is aware of the issue and is conducting an inquiry.

Crossmint defended the classification, stating that some memecoins could be considered digital collectibles. The company also mentioned that anti-money laundering (AML) monitoring and checks by fraud specialists are in place during the payment process. Mastercard declined to approve or reject Crossmint’s approach; Visa stated that network rules must be followed and that it investigates potential non-compliance.