Purchases of memecoins through Robinhood Wallet and Fomo were processed as “digital goods media” in test transactions in New York, allowing users to pay with credit cards through Apple Pay or Google Pay without a separate identity-verification step and, in some cases, receive ordinary card rewards. Chase has challenged the coding of one Visa transaction and opened a case with Visa, while the New York Attorney General’s office said it is reviewing the matter.
The dispute centers on merchant category code 5815, which is generally used for electronically delivered media including digital books, films, artwork and music. Direct cryptocurrency purchases are ordinarily assigned different codes under card-network rules: Visa uses MCC 6012 or 6051, while Mastercard uses MCC 6051 alongside a cryptocurrency transaction identifier.
That distinction can determine whether a bank permits the payment, treats it as a cash-like transaction, charges additional fees, or excludes it from rewards. Chase’s Ultimate Rewards terms say cash-like transactions, including cryptocurrency and similar digital currencies, do not qualify for points.
In the tested transactions, the tokens were delivered directly into the buyer’s wallet after payment approval. The checkout was provided by Crossmint, a payments infrastructure company whose token checkout product is integrated into both Fomo and Robinhood Wallet.
Chase raises the merchant-code issue with Visa
Chase said the Visa test transaction was not identified as a cryptocurrency purchase and that it believes MCC 5815 was the wrong category. The bank said it had opened a case with Visa.
Visa said its network participants are required to follow Visa Rules and that potential rule breaches can prompt a confidential review. Mastercard said it works with acquiring banks and card issuers to correct problems and improve compliance with its standards.
The issue reaches beyond how a purchase appears on a monthly statement. Card issuers frequently apply stricter controls to cryptocurrency because credit-funded token purchases can expose consumers to both borrowing costs and rapid price swings. Banks may also use MCCs and transaction indicators to enforce internal restrictions, including blocks on crypto purchases and exclusions from loyalty programs.
Chase said card-reward treatment depends on the information supplied through card-network data. It added that merchants and acquirers are expected to provide accurate MCCs and any applicable special-condition indicators.
Checkout.com was identified by Chase as the acquirer on the Visa test transaction. The payments company said it does not comment on individual merchant relationships or transaction processing, but said merchants using its services must comply with applicable card-network rules, know-your-customer and anti-money-laundering obligations, and MCC requirements. Checkout.com lists Cross River Bank and Pathward as U.S. sponsor banks for its card-acquiring operations. Pathward said it was not the acquiring or sponsoring bank for the tested purchases.
Checkout offers a faster route to volatile tokens
Crossmint’s product allows a user to select a token inside a participating wallet app, authorize payment with Apple Pay or Google Pay, and receive the asset in the same wallet. Its website says the product includes anti-money-laundering monitoring conducted by a dedicated anti-fraud team, even where the buyer is not shown a conventional know-your-customer flow.
Fomo presents the credit-card route alongside more familiar ways to acquire crypto. Users can transfer assets from an external wallet or buy USDC with a debit card and swap it for Bitcoin, Ethereum, or another token. Robinhood Wallet similarly supports transfers and account connections, while offering purchases through other providers, including Sardine in certain jurisdictions.
Fomo said Crossmint is one of several funding options on the app and accounts for about 7% of user inflows. Most deposits, it said, arrive through other providers. Johann Kerbrat, senior vice president and general manager of Robinhood Crypto, referred questions about the checkout process to the payments partner.
The convenience of the Apple Pay and Google Pay route is particularly apparent in the memecoin catalog. Fomo’s Crossmint-powered Token Checkout supported roughly 150 tokens during the review, including dogwifhat, known as WIF, and several lightly differentiated assets with similar names or tickers. The selection included tokens named “testicle,” three assets using the ticker ASTEROID, and both “wojak” and “WOJAK,” which had near-identical artwork.
Crossmint’s developer materials said its checkout supported memecoins representing about 80% of memecoin trading volume in the preceding 24 hours, based on its last update. Such catalogs give users access to assets that can be highly speculative and thinly differentiated from imitators, without requiring the steps normally associated with opening a new crypto account or completing a separate purchase process.
Crossmint cites collectible guidance as token questions emerge
Crossmint pointed to March guidance jointly associated with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission, which used WIF as an example of a “digital collectible available in the markets today.” The same material described Bitcoin and Ethereum as digital commodities rather than securities.
The regulatory terminology does not automatically resolve how a card transaction should be categorized under Visa or Mastercard rules. Card-network codes are designed to describe the type of merchant activity and transaction being processed, and they influence how issuers apply risk controls. Crossmint later said categorization depends on the nature of the underlying item sold, with different goods requiring different product flows, compliance obligations and MCCs.
After questions were raised over the availability of specific assets, DEGEN and Genius Terminal’s GENIUS were no longer available through Apple Pay or Google Pay on Fomo and Robinhood Wallet. GENIUS had been described as having a fully diluted valuation of about $265 million. YZi Labs, the family office of Binance co-founder Changpeng Zhao, made a “multi-8-figure” investment in Genius Trading in January, and Zhao joined the company as an adviser.
Crossmint did not answer questions on how individual tokens qualified for specific eligibility treatment.
Merchant coding can be changed after scrutiny
Doug Kantor, general counsel of the National Association of Convenience Stores and a member of the Merchants Payments Coalition, said merchant codes are generally assigned during onboarding and are rarely reassessed unless a concern is raised. Once challenged, a code can lead to reassignment, warnings, fines or efforts to recover prior fees, he said.
Kantor cited cases in which merchants faced $10,000 fines over cash-discount programs, illustrating that card-network compliance disputes can carry costs beyond a simple change in transaction labeling.
For wallet providers and payment companies, the review places a fast-growing consumer checkout experience alongside the card industry’s longstanding approach to crypto as a higher-risk financial activity. A decision to recode these transactions could cause issuers to apply crypto-specific restrictions, cash-advance treatment or rewards exclusions to future purchases. It could also force the apps to make the funding route more explicit to users who currently see it as a standard mobile-wallet payment.
Curious how these rules affect traders like you? Learn how to buy crypto via credit/debit cards safely and efficiently.
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