Robinhood Wallet and social trading app Fomo have rolled out a feature that lets users buy meme coins with credit cards through Apple Pay and Google Pay. The move has raised questions over whether it sidesteps card issuers’ rules on cryptocurrency purchases, after it emerged that payments can be made without a separate know-your-customer, or KYC, process.
Crypto news outlet The Block reported on September 1 that the feature is powered by Crossmint’s Token Checkout. Users can fund on-chain purchases with a single tap.
Transactions are processed on the Robinhood Chain network and categorized under the merchant category code for “digital goods media.” That classification typically covers products such as audiobooks and digital movies. Because meme coin purchases are treated as ordinary retail transactions rather than cash advances or financial products, some card users may qualify for rewards including points, miles and cash back.
Chase has launched a review of the payment method amid concerns that it could circumvent existing card rules for crypto purchases. The bank is examining whether the “digital goods media” classification accurately reflects the underlying transaction, The Block reported.
The New York Attorney General’s Office said it is also aware of the issue and is reviewing it.
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