Visa Cracks Down on Credit Card Rewards for Meme Coin Purchases

Visa is closing a loophole in its payment processing system that allowed users to earn rewards on meme coin purchases made with credit cards.

The move follows a challenge from Chase, which flagged one Visa transaction as misclassified and argued it shouldn't have earned rewards. The New York Attorney General's office is also reviewing the matter.

Meme coin purchases will continue but must be processed as crypto transactions, subject to Visa's rules and restrictions.

The workaround allowed users to buy meme coins with credit cards through Apple Pay or Google Pay without completing a separate KYC process. This was possible because the purchases were coded as 'digital goods media', a category typically used for e-books, movies, and music.