Robinhood Wallet and Fomo Let Users Buy Memecoins with Credit Cards, Raising Regulatory Scrutiny

Robinhood Wallet and social trading app Fomo have introduced a feature that allows users to purchase memecoins using credit cards through Apple Pay and Google Pay, bypassing the need for a separate know-your-customer (KYC) process at checkout. The integration, built on Crossmint’s Token Checkout, processes payments on the Robinhood Chain network and classifies transactions under the merchant category code for digital goods media — a category typically used for products like audiobooks and digital movies.

How the Payment Classification Works

By categorizing memecoin purchases as digital goods rather than cash advances or financial product purchases, these transactions are treated like ordinary retail spending. This means some credit cards may offer points, miles, or cashback on memecoin purchases, a departure from how credit card networks have traditionally handled cryptocurrency transactions. Chase has said it is investigating the issue over concerns that the feature may circumvent card issuer rules on cryptocurrency purchases. The New York Attorney General’s office has also said it is aware of the matter and is reviewing it.

Regulatory and Industry Implications

The move comes amid increasing regulatory scrutiny of cryptocurrency products and payment systems. Credit card networks have historically imposed stricter rules on crypto purchases, often treating them as high-risk transactions. The use of a digital goods classification could potentially allow users to earn rewards on purchases that would otherwise be restricted or subject to different fee structures. This has prompted questions about whether such classifications accurately reflect the underlying transactions and whether they comply with card network policies.