Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
What is Coinmama?
Coinmama is a global online marketplace designed to make it as simple and straightforward as possible to buy digital currency. Founded in 2013, it’s helped more than 1 million people in 188 countries buy crypto coins and tokens using fiat currency. Coinmama is a subsidiary of Slovakian company NBV International s.r.o., which is based in Bratislava and is a daughter company of money service business New Bit Ventures Ltd.
You can buy Bitcoin and other currencies on Coinmama by completing the following steps:
- Register for an account. You’ll need to provide your name, email address, country of residence and proof of ID.
- Enter transaction details. Specify which digital currency you want to buy and how much you want to purchase.
- Choose your payment method. Select the credit or debit card you will use to pay for the transaction.
- Fill out the payment form. Provide your card details and follow the prompts.
- Complete payment. The final step is to submit your payment and confirm your cryptocurrency wallet address.
Which cryptocurrencies can I buy and sell?
Coinmama users can buy seven cryptocurrencies through the platform:
- Bitcoin (BTC)
- Ether (ETH)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- Cardano (ADA)
- Qtum (QTUM)
- Ethereum Classic (ETC)
- Ripple (XRP)
Coinmama users in many locations can also sell Bitcoin through Coinmama with high limits and 0% processing fees to receive money directly to their bank account.
Coinmama is currently available in more than 180 countries worldwide, including Australia, and it also accepts all local currencies. A full list of supported countries is available on the Coinmama website.
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.
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 GBP.
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
- Does not accept PayPal, American Express or Discover
- Can’t link to your bank account to expedite new purchases
- No smartphone app
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.
Image source: Coinmama