A Tap Away From Memecoins
Users of Robinhood Wallet and social trading app Fomo can now buy memecoins directly with credit cards through Apple Pay or Google Pay, earning regular purchase rewards in the process, according to an investigation by The Block.
The transactions, powered by crypto infrastructure firm Crossmint, bypass the identity verification steps that most crypto apps require. In tests conducted by The Block, purchases of dogwifhat (WIF) made with Visa and Mastercard credit cards were coded as “digital goods media” – a category that covers audiobooks and digital movies, not cryptocurrency.
That coding distinction matters. Visa and Mastercard assign different merchant category codes to crypto purchases, and those transactions are typically excluded from credit card reward programs. Chase told The Block it believed the 5815 code assigned to the memecoin purchases was incorrect and that it opened a case with Visa. The New York Attorney General’s office said it was aware of and reviewing the matter.
The investigation highlights how crypto payment infrastructure has outpaced the rules designed to govern it. Card networks have long treated cryptocurrency purchases differently from other digital transactions, requiring special merchant codes and flags. But when an intermediary like Crossmint handles the payment routing, the transaction can appear to processors as a regular digital goods purchase rather than a crypto acquisition.
No KYC, No Friction
The checkout process is simple. A user opens Fomo or Robinhood Wallet, picks a token, and pays with a credit card through Apple Pay or Google Pay. Crossmint handles the backend orchestration, and the memecoin lands in the app wallet within seconds. No separate know-your-customer form appears during the flow.
“As far as I know, we’re the only game in town when it comes to that particular product that involves no KYC,” Crossmint Head of Strategy Fonz Olvera told The Block. “Part of it is our secret sauce, and part of it is making sure that there’s no friction by embedding the checkout correctly into the mobile application, handling all the orchestration with Apple Pay, Google Pay.”
Crossmint says its product includes anti-money laundering monitoring by a dedicated fraud team. The company maintains that the digital goods classification was reviewed with relevant stakeholders and is appropriate for eligible digital collectibles. It cites the SEC’s stance that some memecoins can be viewed as collectibles in a securities context, which is why the transactions do not fall under the stricter cryptocurrency merchant codes.
The Block tested the feature by purchasing WIF with credit cards on both the Visa and Mastercard networks. The memecoins were delivered to the respective app wallets after checkout, and each transaction earned the card’s ordinary purchase rewards, including points or cash back. The purchases were made in New York State.
The ease of the process is part of the pitch. For traditional crypto exchanges like Coinbase or Kraken, buying with a credit card typically requires completing a full identity verification flow, linking a bank account, and paying higher fees that can run 2% or more on top of the spread. Crossmint’s approach collapses that entire process into a few taps.
Crossmint says more than 68,000 first-time crypto buyers used the Apple Pay checkout on Fomo as of April. The company noted that weekly active traders on Fomo jumped sevenfold after the product launched. Robinhood Wallet’s Crossmint integration went live in August, extending the same checkout flow to Robinhood’s self-custody wallet users.
Rewards Raise Questions
The card network angle is where the controversy sits. Chase’s Ultimate Rewards terms explicitly exclude “cash-like transactions including, but not limited to, cryptocurrency, other similar digital or virtual currency and other similar transactions” from earning points. The bank told The Block it determines rewards eligibility using network data, which depends on merchants and acquirers supplying accurate merchant category codes.
Crossmint’s transactions did not include the special flags that Visa requires to indicate crypto was involved. Doug Kantor, general counsel of the National Association of Convenience Stores, told The Block that merchant category codes are typically assigned at onboarding and rarely revisited. “There’s not necessarily a systematic process there for rechecking these things,” he said. “For the most part, acquirers make these decisions, and there isn’t a whole lot of process or thought put into it after that.”
A Mastercard spokesperson, after reviewing test transactions, declined to endorse or reject Crossmint’s approach. “Generally, our goal is to work with acquirers and issuers to remediate problems and to improve compliance with our rules and standards,” the spokesperson said.
The issue extends beyond one company’s product. If memecoin purchases coded as digital goods can earn credit card rewards, it creates an arbitrage opportunity that could draw regulatory attention. Credit card companies have specifically excluded crypto from rewards programs to manage the volatility and fraud risks associated with those assets.
A Compliance Gray Area
Under Visa’s rules, direct cryptocurrency purchases must use MCC 6012 or 6051 and carry special condition indicators that flag the transaction as crypto-related. The 5815 code used for the memecoin purchases carries no such requirement. Mastercard similarly requires direct cryptocurrency purchases to use MCC 6051 and a cryptocurrency transaction identifier.
The New York Attorney General’s involvement adds weight to the situation. Letitia James’s office has been active in crypto enforcement, and a review of how memecoin purchases are classified under existing payment rules could have broader implications for how the entire industry handles digital asset transactions through traditional financial infrastructure.
Fomo raised $75 million in a Series B at a $550 million valuation in June, reflecting investor confidence in the social trading model that lets users follow and copy each other’s trades. The app’s memecoin focus has drawn both interest and criticism, with some observers questioning whether the gamified approach to speculative tokens is appropriate for retail investors.
Robinhood Wallet, meanwhile, has been expanding beyond its brokerage roots. The Crossmint integration lets users access thousands of tokens on multiple chains without going through the traditional exchange onramp. Robinhood has not commented publicly on how the memecoin purchases are classified under its card network agreements.
The case could prompt card networks to revisit how they categorize crypto-adjacent purchases routed through payment infrastructure providers. Whether Visa and Mastercard tighten enforcement or leave the status quo depends on how regulators and banks interpret the current rules. For now, the gray area persists, and memecoin buyers continue earning points on purchases that card networks never intended to reward.
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