How does Coinmama work?
Coinmama has been selling bitcoin for several years, and the process for buying bitcoin is reasonably straightforward. First, you create an account with the site. This requires your name, email address and country of residence. You can buy a single bitcoin, multiples or fractions, down to as little as 0.1 bitcoin.
Before you can complete the purchase, however, you must have your own digital wallet and you must be verified. Verification requires you to provide Coinmama with proof that you are who you say you are. You do this by uploading a copy of your passport or driver’s license.
Which cryptocurrencies can I buy?
Coinmama’s main focus is bitcoin, but it also sells Ethereum – the second most popular digital currency after bitcoin and the one preferred by many more advanced investors.
However, you cannot sell your bitcoin tokens back to Coinmama, nor does the service connect you with possible buyers. The company says a sell-side function is “coming soon.” For now, if you want to sell your digital currency, you’ll need to use a different service.
Coinmama is currently available in 226 countries worldwide, and also accepts all local currencies.
Which payment methods are accepted?
- Cash (via Western Union transfer)
- SEPA (Single Euro Payments Area)
Coinmama supports Visa and Mastercard credit or debit cards via the Simplex payment system. If you are paying by cash, you must use Western Union. SEPA, a payment-integration initiative of the European Union for the simplification of bank transfers denominated in the euro, is also an option. Coinmama does not let you link your bank account or support other wire transfers.
How much will it cost me to use Coinmama?
The company charges a 6.3% transaction fee for each purchase. If buying with a credit card, there is an additional 5% fee assessed by Simplex, Coinmama’s credit card processor.
|Credit card purchase fee||5%|
|Cash advance fee*||*|
*Note: According to Coinmama, some banks and credit card issuers consider buying bitcoin to be the same as a cash advance, and will charge users hefty fees to expedite the transaction. This is not a Coinmama fee. Make sure your credit card doesn’t add on any cash advance fees when you buy bitcoin. If they do, dispute it, which just might get you a refund.
Case study: Coinmama case study
Let’s consider the actual cost to you if you wanted to buy US$1,000 worth of bitcoin through Coinmama. (FYI, at the time of writing in September 2017, the price of one bitcoin is just above US$4,500.)
|Credit card purchase fee||5%||US$50|
|SEPA bank transfer||0%||US$0|
|Exchange rate fee||Coinmama prices are set in USD and euros. If you are using another currency, your bank or credit card may assess a currency exchange fee.||Unknown|
|TOTAL KNOWN COST||US$1,105|
It will cost you at least US$1,105 to buy US$1,000 worth of bitcoin using Coinmama. It might even be more, if you are assessed a cash advance fee or a fee for using a currency other than US dollars or euros – like euros.
What is a rate lock?
The price of bitcoin can fluctuate wildly. So much so, that some sellers may actually change your order even after the transaction is registered. This is not the case with Coinmama. Coinmama “locks” the crypto rate at the time of purchase. This means you will receive exactly the amount of bitcoins you ordered, regardless of whether the price went up (or down) between the time you placed the order and when you receive your coins. This purchase assurance, however, comes with a cost. Coinmama’s price, while competitive, is typically not the lowest out there.
How soon can I get my bitcoin?
It can typically take a few hours until you receive your bitcoin assets, despite the straightforward process. First, it can take the blockchain a few minutes to confirm a transaction. This is so, no matter who you buy your bitcoin from. Then, your credit card issuer, or Western Union if using cash, may take up to several hours to confirm payment. Lastly, Coinmama won’t send your coins until you’ve confirmed your digital wallet address. In summary, the following factors will dictate how quickly you will receive your bitcoin.
- Time for bank or credit card processor to verify funds
- Time for you to confirm your digital wallet address
- Time for the blockchain to confirm each transaction
Fortunately, Coinmama is selling from its personal holdings, unlike other service providers or brokers, and this significantly expedites processing time.
Are there any transaction limits?
Coinmama has limits based on cash purchase, credit card purchase and verification status. There is a daily limit of 5,000 USD/EUR per day, whether paying with cash by Western Union transfer or credit card. If you are paying with a credit card, you are limited to 20,000 USD/EUR per month.
What about lifetime purchase limits?
Coinmama places limits based on what it terms “verification levels”. There are three levels:
- Level 1: US$10,000 limit
- Level 2: US$50,000 limit
- Level 3: No limit
For Level 1 status, Coinmama requires each user’s name, address, date of birth, email, phone number and a photocopy of a verifying document, typically a passport or national ID or government-issued driver’s license. It can take Coinmama from several hours up to an entire day to review your documents and verify your status.
If you want to purchase more than US$10,000 in bitcoin – Level 2 status – you must provide a copy of both your passport and driver’s license, or similar identifying documents. Not just one. Coinmama may even require you to upload a selfie of yourself holding these documents.
Ready to go bigger? Level 3 status has no total purchase limits. To get to Level 3, you must contact Coinmama support directly and they will provide further instructions.
Note: Total purchase limits based on verification levels do not alter the daily and monthly spending caps.
Is there a minimum purchase?
Yes, the minimum you can buy is US$60 although the lowest amount of bitcoin Coinmama sells is 0.1 bitcoin, which is currently priced above US$60. This effectively means the minimum purchase is whatever is the listed price of 0.1 bitcoin.
Is it safe to use Coinmama?
Coinmama is a registered money service business based in the Slovak Republic. The company has been offering bitcoin for sale for several years. Coinmama is considered a reputable place to transact bitcoin purchases, however as with all things digital – particularly with everything crypto – there is always an element of risk.
Coinmama offers support via email only, however the site’s FAQ and service desk support documents are reasonably comprehensive and easy to understand.
Coinmama pros & cons
- Live pricing in US dollars and euros
- Buy fractions of a bitcoin
- Easy to review all your orders
- Buy direct from the site – no middleman
- Multi-language site
- Cannot sell bitcoin through Coinmama, only buy
- Does not accept PayPal, American Express or Discover
- Can’t link to your bank account to expedite new purchases
- No smartphone app
Compare Coinmama against other exchanges
To get started with Coinmama, register for an account on the platform’s website. It’s then just a matter of choosing which cryptocurrency you’d like to buy, complete payment and confirm your wallet address.
Before buying bitcoin – or any digital currency – you will also need to have a secure digital wallet. Once this is completed, you can store your bitcoins there and use this wallet to purchase goods and services online. It’s also useful to learn more about bitcoin and blockchain.