Coinmama

Overview and History

Coinmama is one of the first Bitcoin brokers in the space that allows credit card transactions. It has grown in popularity over the past 6 years. Unlike exchanges, brokers source Bitcoin from other sources and sell directly to users. This is to allow people to buy without having to deal with compex trading interfaces or changing and moving prices. When you enter the website, you will see the ongoing rate, just enter how much you’d like to buy, pay and you’re done.

It was started in 2013 to create a simple and easy way for people to buy Bitcoin. They have focused on helping people buy Bitcoin with credit cards. Now, it has expanded its service to include other top cryptocurrencies. To date they have around 2,000,000 customers spread across 188 countries. Coinmama is based in Slovakia with over 30 employees.

The Coinmama team is composed of several highly qualified people. Their CEO, Sagi, is a hi-tech entrepreneur and part of the founding team of a private unicorn (billion dollar company). Nimrod, the COO, is the founder of Israel’s first bitcoin ATM company.

Coinmama supports almost the entire world covering over 188 different countries. However they do not serve all depending on regulations and jurisdictions of some countries and states. They also serve some through 3rd party partners while completely restricting services to others.

Countries and U.S. States that Coinmama cannot serve directly but through a 3rd party only

• Bangladesh
• Egypt
• India
• Nigeria
• Somalia
• Zimbabwe

Selected US States

• Connecticut
• Idaho
• Iowa
• New York
• Utah
• District of Columbia

Completely Restricted Countries and U.S. States

• Cuba
• Crimea
• Iran
• Israel
• Lebanon
• North Korea
• Palestinian Territories
• South Sudan
• Sudan
• Syria

Restricted U.S. States

• Florida
• Hawaii
• New Mexico
• Oregon
• Vermont
• Restricted U.S. territories
• American Samoa
• Guam
• Northern Mariana Islands
• Puerto Rico
• United States Minor Outlying Islands
• Virgin Islands

Coinmama Trade Interface

The first thing you will notice is that there are no charts anywhere. Coinmama takes pride in simplifying the entire buying process. Just choose how much Bitcoin you would like to buy or how much USD you would like to spend. Coinmama allows you to buy using other currencies as well. Accepted currencies are: USD, JPY, EUR, GBP, CAD and AUD. If you would like to buy another type of cryptocurrency, just hover over the buy button at the menu bar and you will see the different available coins for sale. Currently, they offer: Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Cardano, Litecoin, Ripple and Qtum. A simple trick to see the on going rate is to enter the value 1 on the custom amount tab. In the picture below, you will see that the rate is at $6,495 per Bitcoin

As a broker, Coinmama’s prices are generally higher than the market price. They use a service like TradeBlock, which creates an index price of an asset based on the price on different exchanges, and they add a 2% rate to this index price. On top of it, they add another 3.9% for commission. The minimum transaction amount for orders to buy or sell is $50 (or its equivalent in other currencies). The price updates every minute so the price you see now may vary given that cryptocurrencies are volatile assets.

Fees

As discussed above, Coinmama charges a 3.9% commission on all transactions. On top of that, depending on your payment method there are several other fees to take note of. Credit cards and Debit cards will incur an additional 5% momentum fee.

Tip: If you want to make sure there is coverage on your card, take the final amount you want to spend and divide it by 1.05 (so if you have 1000 USD to spend, 1000 / 1.05 = 952). This is the amount you can spend when choosing how much cryptocurrency to buy.

Bank transfer methods, such as SWIFT, do not incur a momentum fee. And carry no additional fees. Orders placed by SWIFT bank transfer are subject to a minimum order amount of $1,000 USD. However, your bank may charge a separate fee for creating the bank transfer so this varies depending on your bank. If you’d like to order below the $1,000 minimum, you will be charged an additional 20 GBP.

Wallet

Unlike crypto exchanges, Coinmama does not provide a wallet for users to store their cryptocurrency on the exchange. Therefore, before you have purchase your coins, you will need to create your own wallet and Coinmama will send the funds there. There are many different cryptocurrency wallets available in the market. Make sure to choose the right wallet for the right coin. Remember that Bitcoin wallets are different from Ethereum wallets so you cannot deposit one on another wallet. Most general use wallets come with built in wallets for different top blockchains. Coinmama recommends ZenGo which is a mobile wallet available on both iOS and Android.

Note: For Bitcoin purchases, Coinmama only supports P2PKH and P2SH Bitcoin address formats. These formats start with a 1 or a 3. These are legacy formats and are more widespread compared to the more recent Bech32 format which starts with bc1.

KYC

As a regulated financial company, Coinmama requires users to perform KYC from users in order for them to access their services. This is a standard procedure in many cases just like when you are opening a bank account. After signing up, you’ll be guided through the KYC process. There are 3 levels of KYC in Coinmama. The higher the KYC, the more details they will ask from you but the higher our spending limits will be.

KYC Level 1

• Requires 1 valid government issued ID (e.g. Passport, Driver’s license or national ID)
• Selfie of yourself holding that ID and a note with “Coinmama” and today’s date written on it.
• Overall account spending limit is $15,000 (note that they count both buy and sell transactions together)

KYC Level 2

• KYC Level 1 Requirements
• A secondary ID.
• Recent utility bill. Accepted utility bills include electric, cable, gas, water bills, property tax, bank statements or credit card statements (paper bill or internet bills are not accepted).
• Overall account spending limit is $50,000

KYC Level 3

• KYC Level 1 and 2 Requirements
• Requires filling a short form at https://support.coinmama.com/hc/en-us/requests/new
• Overall account spending limit is $1,000,000

Credit and debit card purchases are generally approved and processed within fifteen minutes. After that, they still need to get confirmed on the blockchain, which usually takes an additional 10 to 30 minutes.

Bank transfer payments are initiated by the customer through their online banking system or at the bank branch. If you’ve sent a payment to Coinmama via bank transfer, it will usually take 1-3 business days to clear.

Coinmama Mobile App and API

As of this writing, Coinmama does not offer a mobile app. It also does not offer API integration yet for users who would like to build programs on top of their service.

Coinmama Customer Support

There are two ways Coinmama can help you with your issues. The first is through their very extensive support center and FAQ. It covers all the questions you might ask as well as a walkthrough guide to help buy in a step by step way. And second, If you have any specific problem, you can submit support tickets and the team will respond to you within a few hours to days.

Coinmama | Submit a request

Operation Security

As far as fund security goes, there won’t be a problem. Unlike normal crypto exchanges, Coinmama does not offer you a wallet therefore you cannot get hacked there. The security of your Bitcoins and cryptocurrencies will be on the wallet you choose.

As for the website, in February of 2019, Coinmama experienced a breach. Hackers didn’t steal any money in this case but hackers were able to leak out 450,000 usernames and personal details.

Conclusion

Coinmama is one of the biggest Bitcoin brokers in the space. They were one of the first to offer credit card and debit card purchasing of Bitcoin. They have made the interface very simple and easy to use since they are first time purchasers. On the other hand, this ease and simplicity comes with steep fees. Fees can quickly add up especially for users purchasing large amounts. Given that many users still buy from them just shows people are willing to pay a premium for simplicity, security and good service.