A highly controversial practice is currently shaking up international payment networks. Platforms such as Robinhood Wallet and Fomo, through technical provider Crossmint, now allow users to acquire memecoins via Apple Pay or Google Pay without undergoing the standard identity verification process, or KYC (Know Your Customer). Even more concerning, these transactions are not recorded under merchant category codes dedicated to digital assets, but are instead classified as "digital products" like films, books, or music. This technical loophole allows users to bypass bank-imposed restrictions on crypto purchases while unfairly generating loyalty points or cashback rewards.
Banking giant JPMorgan Chase, having identified these irregularities, has officially contacted Visa to demand an explanation. At the heart of this maneuver is the MCC 5815 merchant code used by Crossmint to process transactions. By disguising the purchase of highly volatile tokens, such as WIF (dogwifhat), as a simple multimedia content download, the parties involved are bypassing the strict compliance protocols set by Visa and Mastercard. These payment networks mandate specific markers for all digital assets, a requirement that has been deliberately circumvented here to facilitate access to memecoins.
The defense put forward by Crossmint, which relies on a flexible interpretation of directives from U.S. authorities (SEC and CFTC) classifying certain tokens as "digital collectibles," is being strongly contested by legal experts. They point out that the internal rules of credit card networks are entirely independent of securities regulations. The New York Attorney General’s office has already opened an inquiry into the matter, highlighting the gravity of the situation regarding what appears to be a large-scale transaction code fraud.
The consequences of this affair could be severe. While around 100 tokens were initially accessible through this channel, the hasty disappearance of certain assets following initial media inquiries suggests a rapid realization of the risks involved. Visa now has significant room to maneuver, ranging from correcting merchant codes to imposing retroactive fines. This case sheds light on a persistent gray area where technological innovation attempts to escape financial safeguards, posing a major challenge for the regulation of digital payments in the era of memecoins.