Originally published in the ChangeNOW blog

Cryptocurrency usage is evolving and constantly gaining greater adoption. Statista reports that the number of blockchain wallet users has attained the mark of 60 million by February 2021. Another report stated that over 330,000 transactions with Bitcoin were recorded within the same month alongside over 1.1 million transactions carried out with Ethereum.

Great levels of recent crypto adoption are inevitably leading to the development of a number of instruments aimed at mimicking crypto transactions. The variety of exchanges available are giving users broad varieties of instruments for making transactions; many are starting to introduce descriptor fields for separate operations.

This need for separate fields has been dictated by the growing popularity of crypto payments not only among the community of crypto enthusiasts and traders, but also businesses that are starting to accept digital currencies. It all has led to the introduction of such terms as transaction memo, tag, ID, and the adjacent instructions on how to create a memo and explanations thereof.

How Do I Find the Memo and What Is It?

A crypto memo is basically a separate field in the transaction details window that can be filled with a separate line of information for the recipient. As the name implies, a memo is a descriptor.

Just as with traditional banking operations, users may or may not add descriptions to their transfers, which can range from anything like “Love you” to “Returning debts from last year”. It is common practice for many senders to include memos if the transfer is not of a business nature so as to ensure compliance with tax checks that can flag some operations if they are not properly identified.

The question of how to add a memo is entirely up to the exchange on which the operation is being carried out. Most major exchanges like Binance, Coinomi add such fields by default once the window with the transaction details is opened for the cryptocurrencies that support such fields.

What Is the Difference Between a Memo, a Destination Tag and a Message?

Many exchanges now include two other fields in the description of the transaction, which are the optional Destination Tag and the Message field.

In essence, the technical difference is trivial, as they have no strict requirements for content and are to be filled at the user’s discretion. They are used solely to identify a transaction and ensure that the exchange can be supported with some additional information for faster identification in case of emergency.

None of the given fields are mandatory for filling when receiving transactions. However, some exchanges have started making the Destination Tag mandatory for withdrawals for better compliance with KYC and AML procedures.

There are cases, however, when transfer to exchanges or some payment processing services requires true value to be entered for the transaction to go through. The Destination Tag and Payment ID fields then have to be filled correctly.

As an illustration, it is possible to equate the Destination Tag to a physical address of a building, the Payment ID can be equated to the number of the package to be delivered, and the memo would be the specific apartment in a block of buildings.

Coins Requiring Users to Indicate Memo

There are some coins that always require users to indicate memos. This mechanism is applied to make sure that the user can later get a refund in case something goes wrong.

For instance, the Stellar cryptocurrency has a specific Stellar memo or Stellar deposit memo field in its transfer operation details. A Stellar memo ID can also be present there.

The cryptocurrencies that include memo fields are Stellar XLM, Cosmos ATOM, XEM, Hedera Hashgraph HBAR, Binance BNB, Ripple XRP, and EOS.

Both the tag and the corresponding memo are mandatory requirements for all of the cryptocurrencies mentioned above. A true value must be entered for memos and tags when conducting any of the receipt or deposit operations with the given cryptocurrencies.

What if I Forgot to Enter the Memo?

Most exchanges that have been fully regulated (like Binance and Coinbase) require their users to enter memos for the cryptocurrencies that have such fields marked as mandatory. Should a user forget to enter such values, the exchange can provide assistance through the customer support feature.

However, there is one case when a tag or memo is not required: it’s when users send their funds to privately controlled storage devices or repositories with no regulation requirements (private wallets, desktop or hardware wallets belonging to private individuals or companies).


There is little technical difference between memos, destination tags and payment IDs in essence, but the difference will be evident if the processor needs to quickly identify specific transactions and revert them based on user applications.

ChangeNOW is an instant cryptocurrency exchange service for limitless crypto conversions. We support over 200 coins and are account-free! https://changenow.io/

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