Visa Slams Meme Coin Loophole with Credit Card Rewards Ban

Visa has announced plans to close a loophole that allowed meme coin purchases made with credit cards to be processed under a merchant code intended for digital media. The move follows a challenge from Chase, which reported that one Visa transaction was misclassified and shouldn't have earned rewards.

The New York Attorney General's office is also reviewing the matter. Crossmint, a crypto payments infrastructure firm, had been allowing users to purchase meme coins with credit cards through Apple Pay or Google Pay without completing a separate KYC process.

Visa has informed payment processors that the merchant code used for digital goods media is not appropriate for meme coin purchases. The processors have been given a grace period to wind down the practice, which is expected to end next week.