One of the oldest cryptocurrency exchanges is Coinmama. This exchange was created in 2013, and is registered in Slovakia, although the parent company is New Bit Ventures, which has its headquarters in Israel.
Since its inception in 2013 it has spread its wings quite a bit and now offers its services in 217 countries, including Canada, Australia, the U.K. and the U.S., however it is only available in 24 of the 50 U.S. states.
You can also use Coinmama in many European countries as well as across Asia and in Central and South American countries. You can see a complete list of supported countries here to find out if Coinmama works in your country.
Coinmama is unique among cryptocurrency exchanges in that it provides users a place to buy Bitcoin and Ethereum using credit cards, debit cards and cash (through Western Union). The unique part is that it does not offer any ability to sell cryptocurrencies or to trade cryptocurrencies. Buying Bitcoin and Ethereum is all it does, but it does that extremely well. It may well be the fastest, safest, and easiest way to buy Bitcoin and Ethereum.
Unlike other exchanges, all of the sales of Bitcoin and Ethereum made by Coinmama are fulfilled by its own stock of coins. So, you’re buying directly from Coinmama. This makes transactions far more secure than with many of its competitors. Additionally, Coinmama does not offer its own wallet on the site. Any purchases need to be sent to the users own cryptocurrency wallet offsite.
Below you can learn more about opening an account at Coinmama, purchasing Bitcoin and Ethereum, associated fees, security, customer support, and some downsides to using Coinmama.
How to Register and Verify Accounts
Signing up for Coinmama is as simple as filling in a short online form with your email, name, your chosen password and your country of residence. Click the button that says “Create Account” and the system will send a verification email to your email address. Head over to your email and click the verification link in the email from Coinmama. You’re now ready to log in! All told it should take 60-90 seconds to complete the registration process for a Coinmama account.
Once you’ve registered and logged in you can go ahead and buy some Bitcoin, but first you’ll need to provide some identity verification. This allows Coinmama to remain in compliance with the Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations that are prevalent in many countries. In the past Coinmama allowed the purchase of up to $/€150 in cryptocurrency without additional verification, but that policy has recently changed and all accounts must be verified to make a purchase now.
In order to verify your identity you’re required to complete a verification form that includes your full name, date of birth, gender, and physical address (no PO boxes).
Additionally, you’ll need to submit a form of ID (driver’s license, passport or national ID card). The ID submitted must include both sides and it is also recommend that they are done in color, entirely visible (no corners or edges cut off), high quality images of better than 300dpi, still valid and with the expiration date clearly visible, and with a file size that doesn’t exceed 4MB.
The good news is that after you upload these documents you can expect the verification process to be completed in just a few hours, and in some cases as little as a few minutes, although it may take longer in the evenings and on weekends. If you require faster verification for some reason simply contact the Coinmama support team and they will attempt to expedite your verification request.
Purchasing Bitcoin/Ethereum at Coinmama
One benefit of Coinmama is that there is no need for you to register your credit or debit card with Coinmama to make a purchase. One you’ve verified your account you’re able to buy up to $5,000 daily in cryptocurrencies, $20,000 monthly and $10,000 lifetime totally. This is the Level 1 verification.
It is possible to upgrade to Level 2 and 3, which provide larger lifetime total purchase limits of $50,000 and $1,000,000 respectively. Coinmama does not store your credit/debit card details on their servers, but simply passes the information along to the credit card company to process the payment. Note that your credit/debit card address must match the address on your Coinmama account.
Filling in the purchase details is simple. You choose the amount of Bitcoin you wish to buy (Coinmama accepts purchases for amounts as small as 0.011 BTC or 0.18 ETH, although the site says purchases as small as $60 is allowed, this is dependent on the price of the cryptocurrencies and at present the minimum purchase is just under $100. You then specify the payment method, and a cryptocurrency wallet address to receive the coins.
Unlike most cryptocurrency exchanges, Coinmama does not have an online wallet to store currency or cryptocurrency in. This means an external wallet must be used. There are many different wallets available for both Bitcoin and Ethereum. If you don’t already have a wallet for cryptocurrencies, you may want to have a look at our guide to creating a wallet.
All wallet addresses are confirmed by Coinmama via an email link sent after the purchase transaction is submitted. This means users are unable to purchase Bitcoin or Eethereum to be sent to someone else’s wallet. If you’re interested in sending the coins to another person you’ll need to check your wallet documentation to learn how to do this.
Once your payment on the site is completed the transaction is processed by your credit or debit card company. This can take up to 20 minutes in some cases, but once the transaction has been approved the Bitcoin/Ethereum will be eligible for transfer to the wallet address you specified during the order process. Coinmama will immediately send the coins, but the time it takes to reach your wallet is dependent on network congestion.
In general though deliveries will take place within minutes of the order being placed, which is helpful those looking to take advantage of positive price moves. Coinmama also locks in the price once the order is placed, so even if it takes hours for you to receive your coins you’ll get the price at the time the order was placed.
This avoids the confusion that could occur if clients were to receive a different amount of coin than they expected, simply because of fluctuating prices. If an order is aborted for any reason the Coinmama system voids the payment and it is refunded to the customer account within 48 hours.
The fees at Coinmama are one of the big negatives to buying from this exchange. The transaction fees at Coinmama are quite a bit higher than most of their rivals. Users pay a 5.5% fee to Coinmama for every transaction. Sorry, no discounts for volume buyers at this exchange. This fee is included in the price that is quoted to you for the Bitcoin and Ethereum on the Coinmama platform. In addition to that transaction fee, you’ll be charged an additional 5% when using a credit or debit card for your purchase. And in some cases your bank may also charge you a cash advance fee if they consider this type of purchase to be a cash advance. The only good point there is that you may be able to dispute the cash advance fee with your bank and get them to reverse it.
Purchase Limits at Coinmama
The purchase limits at Coinmama are quite generous, especially in light of credit card transactions. Once you’re a verified user you are able to purchase up to $5,000 worth of cryptocurrencies per day and up to $20,000 per month. The daily limit resets exactly 2 hours after your most recent purchase, while the monthly limit is a rolling 30 day window.
Every purchase at Coinmama is transacted in USD or EUR, however the company says it will accept any local currency. It does have the caveat that the user is responsible for any exchange fees that may be charged by their own bank or credit card company.
The total amount of cryptocurrency one may purchases over their lifetime with Coinmama is determined by the level of verification they undertake. The more personally identifiable information you provide, the higher level you will reach and the greater your total purchasing limit. Keep in mind that the $5,000 daily limit and $20,000 monthly limit is always applicable, but the level limits and requirements are as follows:
- Level 1: This level allows users to purchase up to $10,000 through Coinmama as a lifetime limit. This level only requires the submission of a valid government issued ID.
- Level 2: This level allows users to purchase up to $50,000 worth of cryptocurrency (combination of Bitcoin and Ethereum) through Coinmama over the course of their life. In order to access this level users will need to provide two valid government issued IDs, as well as either a utility bill or a selfie of the user holding their ID.
- Level 3: This is the highest level of verification on Coinmama and allows users to purchase up to $1 million in cryptocurrency from Coinmama (combination of Bitcoin and Ethereum) over their lifetime. In order to obtain this level of verification, users are required to fill out a short form provided by Coinmama and return it.
Supported Countries / States
As mentioned above, Coinmama is available for citizens of a wide number of countries, possibly the widest amongst the cryptocurrency exchanges and certainly more than most of its rivals, including Coinbase and BitStamp. The only countries that Coinmama does not offer its service in are countries which have banned cryptocurrencies or countries which have been sanctioned by the U.S. or European powers.
In addition, in the U.S., Coinmama is only available in the following 24 states: Arizona, California, Colorado, Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Missouri, Montana, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Wisconsin.
Finally, Coinmama is one of the only exchanges that offers the possibility of purchasing cryptocurrencies with cash deposits through its acceptance of Western Union transactions. The only other way to use cash transactions is through peer-to-peer cryptocurrency marketplaces.
Security & Customer Support
While Coinmania is among the oldest of the operating cryptocurrency exchanges, it is also relatively small, with an average of 1 million monthly visitors.
Contrast that with Coinbase and its 34 million monthly visitors and Poloniex and its 44 million monthly visitors and you get an idea of how niche the Coinmama exchange is. Mostly this can be boiled down to the fact that only two cryptocurrencies are being sold, and that you can’t sell or trade on the platform.
Putting that aside, Coinmama is distinctive in that it has never had a security breach. The exchange is also growing slowly and steadily, and has registered in the U.S. as a money service business with the United States Treasury Department Financial Crimes Enforcement Network (FINCEN).
Of course Coinmama is far less susceptible to hackers, simply because it doesn’t hold any client coins or funds, nor does it store credit card information. Basically there is nothing there to hack and steal, with the exception of Coinmama’s own cryptocurrency holdings.
In terms of customer support, Coinmama offers support via email, just like most other cryptocurrency exchanges, and has an extensive helpbase to answer most common questions. As you might suppose, online reviews of the customer service at Coinmama are mixed, as is the case for pretty much the entire cryptocurrency exchange industry.
That said, it does appear that email inquiries are almost always responded to within 24 hours, which is also standard for the industry. The quickest responses naturally occur during the exchanges stated business hours of Sunday to Thursday, from 11 pm to 7 am Pacific Time.
Downsides and Conclusion
Coinmama has some unique advantages over other, rival cryptocurrency exchanges, not least of which is its global reach, ability to purchase with cash through Western Union, excellent security, and high buying limits. But there are also some drawbacks to the Coinmama platform:
1. Presently there is no mobile app for Coinmama and the only way to access the exchange is through a web browser. The lack of a mobile app is a real negative for those who use their mobile devices for nearly everything these days. There is also no API for the platform, which means developers have been unable to release third-party extensions that could increase the functionality of the platform.
2. You can only place buy orders through Coinmama. Without the ability to trade coins and sell coins the utility of the platform is quite limited. Consider that if you buy Bitcoin from Coinmama and later decide to sell you’ll need to sign up at another exchange to do so, although Coinmama does claim that selling on its platform is coming.
3. While the ability to send cash payments through Western Union is great, and the use of credit and debit cards is convenient, the lack of other payment methods can be frustrating. It is somewhat surprising given the KYC and AML requirements now in place that bank wires and ACH transfers are not possible with Coinmama.
4. Besides only being able to buy, Coinmama only supports two cryptocurrencies – Bitcoin and Ethereum. The development team has said that more coins will be added in the future, but there is no roadmap or timeline for this. Even Coinbase supports 4 coins, and most exchanges offer trading in dozens, if not hundreds of coins.
5. The fee structure could be improved greatly. A total of 10.5% in fees for purchasing Bitcoin and Ethereum seems excessive, and that doesn’t even account for potential bank imposed fees. Until all is said and done some users could be paying a 20% premium by purchasing coins at Coinmama.
Despite the downsides there are still some positives for using Coinmama. One very positive factor is that it forces users to learn to setup their own digital wallet and to make it secure.
The lack of an exchange wallet highlights the fact that the founders of Coinmama are strong advocates of keeping control of your private keys at all times, and not trusting them to a centralized exchange.
There are several reasons for this, not least of which is that this type of centralized setup makes an exchange a perfect target for hackers, as we’ve seen several times in the past with other exchanges that do have onsite wallets for their clients.
Although it isn’t as feature rich as some other exchanges, the Coinmama exchange can be an excellent choice for those who are simply looking to buy and are also looking for security in their transactions. You could do far worse than Coinmama, and one thing you can be sure of is that they won’t lose your coins.
Feature image credits: