Robinhood Wallet, Fomo enable credit card memecoin buys, prompting rules concerns

Robinhood Wallet and social trading app Fomo have introduced a feature that lets users buy memecoins with credit cards through Apple Pay and Google Pay without a separate KYC process at checkout, The Block reported. Chase said it is investigating the issue over concerns the feature may circumvent card issuer rules on cryptocurrency purchases. The service is built on Crossmint’s Token Checkout, which processes payments and lets users fund onchain purchases with a single tap. Transactions are processed on the Robinhood Chain network and classified under the merchant category code for digital goods media, a category that typically includes products such as audiobooks and digital movies. Because the purchases are categorized as digital goods rather than cash advances or financial product purchases, they are handled like ordinary retail transactions. That means some credit cards may offer points, miles or cashback on memecoin purchases. According to The Block, credit card networks have traditionally treated cryptocurrency purchases differently from standard retail spending, and Chase is reviewing whether the digital goods media classification accurately reflects the underlying transactions. The New York Attorney General’s office also said it is aware of the matter and is reviewing it.