Complete Guide to Coinmama
Founded in 2013, Coinmama, a cryptocurrency exchange, is registered in Slovakia. It is however owned by New Bit Ventures Limited from Israel. The exchange is available in 24 states in the USA, and operates in 217 countries globally. The platform allows users to buy Ethereum and Bitcoin through Western Union, or with debit and credit cards. Coinmama does however not allow users to sell or trade crypto. All token purchases are transferred directly from Coinmama’s own holdings. This makes transactions more secure than what it is for some of its competitors.
Coinmama is one of the easiest and fastest ways to purchase Ethereum and Bitcoin with a bankcard. Not all exchanges offer this facility.
Coinmama is currently only available as a website and does not have a mobile app. The platform has also not released an API that would assist developers that want to utilize the exchange features of the platform to create applications. Apart from being available internationally, the most appealing feature of Coinmama is that users can buy up to $/€ 150 of tokens without identity verification. This option is not available from most of its competitors.
To buy for higher amounts however, users have to verify their identity with an official government-issued ID for AML and KYC purposes (driver’s license, national ID card or passport). They also have to complete a verification form containing full name, gender, date of birth, address and debit or credit card number.
Both sides of the documents need to be submitted. Coinmama’s recommendations regarding these documents are listed below:
• Entirely visible;
• Images must be high quality, i.e. 300dpi or higher color images;
• Valid documents, with a clearly visible expiry date;
• The maximum file size allowed is 4MB.
Coinmama typically verifies documents that are uploaded to the site during business hours within a few hours. Documents uploaded during evenings and weekends will however take longer to process. The Coinmama customer service team does however strive to help users that need fast verification.
Verification is normally done in less than 10 minutes, after which users can buy digital currency immediately. Orders are delivered within minutes, allowing users to take advantage of beneficial price movements. The exchange rate is locked in at the time that the order is placed. Even if the exchange rate fluctuates between ordering and receiving the coin, users receive the exact amount of tokens that was ordered. Coinmama explains that the lock-in was instituted to eliminate confusion caused by fluctuations in the market rate, especially when customers received less currency than what they expected. Coinmama automatically voids payment for aborted orders within 48 hours and the money is refunded to the customer’s bank account.
How to Buy Crypto on Coinmama
Users don’t have to register their bankcard to buy tokens on the exchange. Registered users can create an order regardless of whether their identity has been verified or not. They then choose the amount they want to purchase, enter the wallet address and fill out the card details on the checkout page. For users whose identity has been verified, the address associated with the credit card must match the address on the customer account. No bankcard details are stored on Coinmama’s servers. Once the payment is completed, the credit card processor processes the transaction.
This may take up to 20 minutes, after which the funds are transferred to the customer’s chosen wallet. Once the payment and wallet address are confirmed, the crypto is sent to the user immediately. Currently, the minimum amount that can be bought on Coinmama is USD 60 (or the EUR equivalent). This is however based on the Bitcoin price, i.e. the minimum is the price at which 0.1 Bitcoin is listed.
Coinmama does not have online wallets for users on the exchange, unlike many of its competitors. Users therefore have to create an appropriate wallet to which the exchange can send their tokens once bought. Coinmama sends an email link to users with which they can confirm their wallet address. This validation procedure prevents customers from buying crypto on behalf of others. Users wanting to transfer crypto to another wallet should do so through their own wallet provider.
What Fees does Coinmama charge?
The transaction fees on Coinmama are quite high, with 5.50% paid to Coinmama for every transaction. This is higher than its competition. The Ethereum and Bitcoin rates shown on the website includes this fee. Coinmama also charges an additional 5% on bankcard transactions. Once customers have chosen their method of payment, this fee is added. If the financial institution views a transaction as a ‘cash’ transaction, they might also charge customers a Cash Advance fee. Studies show that on average, Coinmama customers should expect to pay an additional 10% in fees when using the platform.
Does Coinmama have any Purchase Limits?
The purchase limits on Coinmama are high, especially when a credit card is used. Users that have been verified can buy up to $5,000 per day, while the maximum limit per month is $20,000. Daily limits are imposed for 24 hours from when the limit is reached, while monthly limits use the accumulated total of the previous 30 days. Currently, pricing is only displayed in EUR and USD, but it is expected that other currencies will be added soon. Orders are however accepted in all currencies, although exchange fees might be applicable to customers using currencies other than EUR or USD.
The amount of crypto that may be purchased depends on the verification level that has been achieved. Users that provide more documentation can buy more currency. The daily and monthly limits do however apply irrespective of the verification level reached. Limits vs Requirements are broken down as follows:
• Level 1: Users that have provided a valid government issued ID may buy up to 10,000 USD.
• Level 2: Users that have provided two valid government issued IDs, as well as a selfie of the user holding their ID, or a utility bill, may buy up to 50,000 USD.
• Level 3: Users that fill out a short form and return it to Coinmama can reach this highest level of authorization and may buy up to 1 million USD in tokens.
Which Countries / States are supported?
Coinmama is available in numerous countries, probably the most in the blockchain industry and substantially more than many of its rivals, including BitStamp and Coinbase. Coinmama is not available in sanctioned countries.
Users wanting to buy from Coinmama in non-sanctioned countries must have a Master or VISA Card issued in those countries. Coinmama is also available in the following US states: California, Arizona, Florida, Colorado, Indiana, Illinois, Kentucky, Kansas, Massachusetts, Louisiana, Michigan, Maryland, Montana, Missouri, New Jersey, Nevada, North Carolina, New Mexico, South Carolina, Pennsylvania, Texas, Tennessee, Wisconsin and Virginia.
Coinmama is also one of the few sites that allow customers to buy tokens with ‘cash’ deposits through Western Union.
Is it Safe to use Coinmama?
Even though Coinmama is a relatively small exchange in the crypto universe, they have not experienced any known security breaches and are gradually increasing their market share. They do however remain behind their competitors, with an average of only 600k visitors per month, compared to others that have 34 million and even 44 million visits per month. Coinmama is registered as a money service business with FINCEN in the USA. Coinmama doesn’t hold any cryptocurrency on users’ behalf, making it less of a target for attacks than other exchanges. Although it keeps records of users’ credit card information, the website states that bankcard information is not kept on the exchange server.
What Customer Support does Coinmama offer?
Coinmama has an extensive list of FAQs and email support is available. Online reviews of their customer support response is mixed, as it is with most cryptocurrency exchanges. No major issues with response times are apparent, with most queries consistently handled within 24 hours. Responses over weekends and public holidays obviously take longer. Its business hours are from Sunday to Thursday, 11 pm to 7 am Pacific Time.
Coinmama offers a number of advantages such as an option to buy with cash through Western Union, global accessibility, debit and credit card transactions for instant access to Bitcoin and Ethereum, and high daily purchase limits.
There are however also numerous disadvantages, including:
• Although debit and credit cards from most countries in the world are accepted, it does not offer other payment choices.
• The platform can only be used to buy token, making Coinmama’s functionality very limited.
• Users that want to buy digital assets, or even check their balance while on the go, will view the lack of a mobile app as a negative.
• Coinmama currently only supports Ether and Bitcoin, making it among the smallest in terms of digital currencies offered.
Another advantage Coinmama has is that it forces its users to use a secure digital wallet. The platform strongly advocates that individuals should not store their token on an exchange, as these are priority hacker targets. By not storing any digital currency for users, Coinmama is effectively nudging users to set up their own digital wallet, or buy a hardware wallet.
Coinmama’s reputation within the fin tech industry is that it is a safe, honest and trustworthy platform. It might lack some of the additional features its competitors offer, and it may be relatively expensive, but it does perform its function very securely and efficiently.