Visa Tightens Memecoin Card Classification Amid Regulatory Scrutiny

Visa is revising its memecoin card classification policies after scrutiny from financial institutions and regulatory bodies. The move follows complaints that transactions involving cryptocurrency purchases were being categorized as digital media, which could lead to incorrect rewards and classifications.

A test purchase made with a Visa card received the merchant category code 5815, which covers digital goods like movies and audiobooks. However, this classification is not applicable to cryptocurrency purchases, which use different codes.

JPMorgan Chase challenged at least one Visa transaction that carried the wrong code and opened a case with Visa. The bank reportedly said it was reviewing the issue, while the New York Attorney General's Office also stated they were looking into the matter.

Visa is now asking payment processors to stop using the digital-media category for memecoin purchases. Processors have until next week to update their systems and comply with the new guidelines.