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Interesting one from The Block today. Test purchases of memecoins through Robinhood Wallet and the Fomo app were apparently processed and categorized as "digital media" rather than crypto, which meant the credit cards used actually earned rewards points on the buys.
That matters because Visa and Mastercard have had rules for years discouraging or blocking crypto purchases on credit lines, partly to limit issuer exposure to a volatile asset class bought on borrowed money. Most exchanges either block credit cards outright or code the transaction so it gets flagged and often hit with a cash-advance fee instead of standard purchase rewards.
If these two platforms are coding memecoin buys as something else entirely, that's a different situation. It suggests the transaction is slipping past the merchant category codes that card networks rely on to apply their crypto restrictions in the first place.
No word yet from Visa, Mastercard, Robinhood or Fomo on whether this was intentional, a processor-side quirk, or something that's about to get closed. Card networks tend to move fast once a workaround like this gets attention, especially one that lets people rack up rewards points buying volatile tokens on credit.
Worth watching whether this gets patched quietly or turns into an actual enforcement or compliance story. Anyone here tested this themselves and seen the same coding on their statement?
Want to start trading? Sign up on fomo.family and save 10% on trading fees!
That matters because Visa and Mastercard have had rules for years discouraging or blocking crypto purchases on credit lines, partly to limit issuer exposure to a volatile asset class bought on borrowed money. Most exchanges either block credit cards outright or code the transaction so it gets flagged and often hit with a cash-advance fee instead of standard purchase rewards.
If these two platforms are coding memecoin buys as something else entirely, that's a different situation. It suggests the transaction is slipping past the merchant category codes that card networks rely on to apply their crypto restrictions in the first place.
No word yet from Visa, Mastercard, Robinhood or Fomo on whether this was intentional, a processor-side quirk, or something that's about to get closed. Card networks tend to move fast once a workaround like this gets attention, especially one that lets people rack up rewards points buying volatile tokens on credit.
Worth watching whether this gets patched quietly or turns into an actual enforcement or compliance story. Anyone here tested this themselves and seen the same coding on their statement?
Want to start trading? Sign up on fomo.family and save 10% on trading fees!