Coinmama Review

Coinmama Review | Why cryptocurrencies Coinmama | bestbitcoinexchange

October 05, 2017 by BestBitcoinExchange 6 Comments

Does Coinmama really compare to all those other bitcoin & ethereum exchanges out there? Perhaps you have heard how this crypto sales-only platform has attracted hundreds of thousands of international users though its comparatively flexible global credit-card purchases policy. Throughout this Coinmama review I will show you that it's all true: while the site remains relatively small, they have never yet experienced any known security breaches, and they continue to successfully sweep-up market share right from under the feet of the largest trading sites.  

Coinmama review

Coinmama is the brand name of New Bit Ventures Ltd, an Israeli exchange started by bitcoin enthusiasts Nimrod Gruber and Ilan Schuster in April 2013. It is registered with FinCEN in the US as a money service business (MSB), but its headquarters are located in Ra'anana, Israel.

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Min Deposit
1
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BitCoin
Bitcoin Cash
Dash
Ethereum
IOATA
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£100
2
Debit-Card Fast-Bank-Transfer
BitCoin
Bitcoin Cash
Dash
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Ethereum
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Lisk
£500
User Votes
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BitCoin
Bitcoin Cash
Dash
Ethereum
IOATA
Ethereum Classic
Lisk
Litecoin
Monero
Min Deposit £100
User Votes
Coins Available
BitCoin
Bitcoin Cash
Dash
Ethereum Classic
Ethereum
IOATA
Lisk
Min Deposit £500

The exchange is best known for facilitating the purchase of bitcoins and ether with debit and credit cards. Its services are accessible from most parts the globe. The only obstacle that may exist for a majority of users, except in the US, is the unavailability of Visa or Mastercard services in their country of residence.  

Advantages of using Coinmama

  • Coinmama accepts credit & debit cards from all countries around the world (over 180 nation states). This is a significant advantage compared to larger exchanges such as Coinbase or Bitstamp
  • Possible to deposit via Western Union payments - thus making Coinmama one of the only sites to allow "cash" deposits
  • Delivers within minutes after an order is placed, allowing users to make the most of advantageous price movements
  • Holds no user funds but sells from its holdings. Such setups makes Coinmama significantly more secure.
  • Offers a high daily buying limit of $50,000 for new signups. Coinmama's limit is therefore multiple times the limit of leading exchanges like Blockchain.info or Cex.

 

Disadvantages of using Coinmama

  • No conventional trading platform/interface or trading tools such as charts. Users can only make simple buy orders. Larger exchanges like Kraken & Bitstamp give the option of placing advanced trades via the graph interface.
  • Doesn’t accept bank wire and SEPA payments. Although credit card is a very popular deposit method, many users prefer to have a wider choice and SEPA is usually the 2nd most popular payment medium.
  • New users are not offered a free bitcoin bonus like Coinbase's $10 reward system.
  • Coinmama does not buy back your cryptocurrency, they only sell it to you. Be sure to plan ahead and sign up on an alternative exchange if you are thinking of selling in the future.
  • Supports only bitcoin and ether. I have not heard of Coinmama having plans to bring on other major altcoins.
  • Expensive compared to other exchanges—charges up to 12% per transaction
  • Like most exchanges, Coinmama requires identification to buy. Other places allow users to purchase without ID.
  • Has no mobile application or API for developers to build third party tools. Other larger exchanges like Coinbase or Kraken have such functionality.

 

Coinmama Stats

Depending on local regulations, services are unavailable in a majority of US states. You can use Coinmama  in the states of Colorado, Florida, Illinois, Indiana, Kansas, Massachusetts, Michigan, Montana, New Mexico, South Carolina, North Carolina, Pennsylvania, California, Tennessee and Texas.

Even with this limited availability, site analysis platform Similarweb.com reports that Coinmama’s website receives its highest number of visitors from the US (32.13%). Other countries that bring the most traffic to Coinmama.com are the UK (5.15%), Israel (3.68%), Canada (3.49%) and France (3.33 %.).

Compared to other major exchanges, Coinmama receives among the lowest number of monthly visitors—0.6 million per month. On average, Poloniex receives about 44 million, Coinbase 34 million, Kraken 14 million, and CEX.io 2.5 million.

Coinmama does not have a mobile application but all its services are accessible through mobile browser. The exchange is yet to release an API for users to create custom applications that are compatible with the platform. There is little need, however, given that Coinmama is not a trading platform. Transactions are always between you and Coinmama.  

Account registration

As part of meeting Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements from regulators, Coinmama requires personal identifying information. When you sign up, you provide an email address, your name and country of residence. Before you can buy bitcoins or ethers, the exchange has to verify your account. The verification form requires full name, date of birth, gender, address and credit or debit card number.

Coinmama registration

The Coinmama registration process is quite simple

The verification process also involves submitting photos of the front and back sides of an identification document. The document can be a passport, driver’s license or a national ID card. After the submission of the application, the process can take a few hours to up to a day before your account is verified and activated. It takes longer if you place your application on the eve of or during a weekend or public holiday.

The most frequent reason Coinmama declines applications is due to poor quality of ID photos. To avoid this, make sure photos of your ID are of high resolution and all four corners are visible.

After verification, you can buy bitcoins or ether worth up to $50,000. If you need to buy more, you will have to contact support. In comparison to other exchanges, Coinmama offers one of the highest daily buying limits of bitcoin or ether available immediately after signup and verification of your account.

For example, Coinbase limits new signups to purchases of $200, Kraken imposes a new account limit of $2,500 and Poloniex limits to $2,000. Unlike Kraken or Poloniex, however, Coinmama offers no account tiers.  

Coinmama Security

To do a full Coinmama analysis let's look at just how safe it is for buying bitcoin and ether.

As with all centralized services, these represent prime targets for hacking. However, Coinmama holds no user funds and instead sells bitcoins out of its own inventory. When you place an order, you provide a wallet address to which they can send your bitcoins or ether.

As of October 2017 Coinmama has not experienced any security breaches. That's quite impressive when compared to Coinbase, who did have one early, yet major hack on their exchange.

An order usually executes within minutes after you place it, as long as your debit or credit card is approved for use on the platform. If an order aborts, the system automatically voids the payment within 48 hours and the money is refunded back to your bank account.

A few users have made complaints in online forums that they’ve had their card charged but the exchange failed to deliver coins purchased. This is an uncommon occurrence, however.

While Coinmama doesn’t hold user funds, customers may still experience losses if the exchange is a target of hacking. Aside from cryptocurrency funds belonging to the exchange, user credit card information could be a target for theft. However, Coinmama assures customers that credit and debit card information is not stored on the exchange server.

They also state that their system encrypts users’ sensitive personal information and stores it on secured and dedicated servers.  

Available crypto assets

Coinmama supports only bitcoin and ether at this time, but it has promised to add more cryptocurrencies in the future. While all exchanges started as marketplaces for buying and selling bitcoins, most have since added Ethereum and other cryptocurrencies that have come along and become popular.

In comparison with other major exchanges, Coinmama is among those that support the smallest number of cryptocurrencies. Poloniex supports over 70 crypto assets, Shapeshift supports 50 and Coinbase 5.

A short guide for using Coinmama's website

Coinmama stands out also because it is the only major exchange that sells cryptocurrency but doesn’t buy it back. Some exchanges, such as Poloniex and Bitstamp, match buyers and sellers. Others such as Coinbase buy and sell directly from clients.

The exchange doesn’t disclose the source where it buys bitcoins and ethers. A thorough inspection of Coinmama always requires a search online. Doing so returns a user who goes by the name Coinmama on Localbitcoins, giving an indication that the exchange may buy the bulk of its bitcoins from users on other exchanges.

Coinmama offers no trading tools, such as charts and price notifications, as do most other exchanges. As a trader, you can only use the platform to buy bitcoins or ethers to hold for a long position.  

Coinmama Fees

Coinmama is one of the most expensive exchanges. It charges 5% for every credit or debit card deposit you make, with a minimum deposit set at US$10. This charge is in addition to an exchange transaction fee of 6.3%.

In comparison, CEX charges a transaction fee of 3.5%, BitPanda charges 5% and Coinbase charges 3.75%. If users go to other platforms to trade between crypto assets, an even bigger gap in the cost of trade is incurred. As a rule of thumb, you can expect exchanges to charge less when you are buying cryptocurrencies with other cryptocurrencies.  

Supported payment methods

coinmama buying bitcoin credit card

Buying BTC with a credit card on Coinmama

Coinmama’s strength lies in the fact that it facilitates buying of bitcoins using debit and credit cards from most countries. It currently accepts Visa and MasterCard. It also accepts payment through Western Union. By making special arrangements with support, you can also use cash to buy bitcoins or ether.

Most other exchanges such as Coinbase, CEX and Bitstamp have a wide range of payment options that include bank wire, SEPA and even altcoins. The lack of a wide range of payment methods makes Coinmama less attractive compared to other exchanges.

When using a credit or debit card, Coinmama accepts payment in whatever local fiat currency the buyer prefers. The price is displayed, however, in either USD or EUR. The exchange has promised to add more fiat currencies in time.  

Customer support

The primary channel to reach Coinmama support is through email. Compared to other major exchanges, response is very fast, with queries consistently replied to within 24 hours.

Waits are longer over the weekend or during public holidays. The exchange has a detailed knowledge-base platform that provides answers to most common questions. Furthermore, the support team also responds to questions left on their blog.

One common customer complaint is the slow account verification process. Sometimes users say they are also unable to successfully place orders following verification.  

Alternative sites to Coinmama

There are of course many similar sites to Coinmama, and most will have two-way trading. Here are the best alternatives:

  • Coinbase - highly popular & easy-to-use platform. Read my review of Coinbase for details. Credit card & bank transfer purchases. (USA)
  • CEX - as easy as to use as Coinmama. Credit card & bank transfer deposits. (UK)
  • Bitstamp - separate interfaces for beginner & advanced users. This Bitstamp review explains the card & bank transfer purchasing. (Luxembourg)
  • Blockchain.info - world's largest online wallet. Similar to Coinmama in that users can only make buy orders (no bitcoin selling). Credit card purchases available for EU users. (UK)

 

How was your experience using Coinmama? Was it good or bad, and what would you add to this Coinmama review? Let me know in the comments below.

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6  Comments on “Coinmama Review | Why cryptocurrencies Coinmama | bestbitcoinexchange”
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coinmama review
https://www.bestbitcoinexchange.io/reviews/coinmama/#5ad320e56384e22fe9570fc7
Great post! Full Coinmama Review 2018 here!
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tbw
https://www.bestbitcoinexchange.io/reviews/coinmama/#5aabedfdc1cc2a02a446d45f
Whats the point of using coinmama if its more expensive and has barely any coins?
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BestBitcoinExchange
https://www.bestbitcoinexchange.io/reviews/coinmama/#5aabedfdc1cc2a02a446d460
One if it's biggest advantages is that you can accepts cards from over 180 countries, also offers a high upper limit of first timers. So it will depend on what you want from the exchange, if you want cheap fees and lots of coins then take a look at bittrex, poloniex, bitstamp.
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Frank
https://www.bestbitcoinexchange.io/reviews/coinmama/#5aabedfdc1cc2a02a446d45d
For people in Canada, it is much harder to get access to BTC even though they are willing to pay more.
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BestBitcoinExchange
https://www.bestbitcoinexchange.io/reviews/coinmama/#5aabedfdc1cc2a02a446d45e
Quadriga, and Coinsquare are the two largest Canadian exchanges
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Spencer
https://www.bestbitcoinexchange.io/reviews/coinmama/#5aabedfdc1cc2a02a446d45b
Provided that it continues to have a lot of BTC and Ethereum in their inventory, Coinmama is sure to have more users in the years to come. This might sound irrational, but there are people who are more than willing to pay high transaction fees just so they can buy Bitcoin as fast as possible. I think this is what Coinmama is banking on. There are many people with debit and credit cards around the world who want a piece of the Bitcoin market, but they'd prefer taking the simplest route. With Coinmama, they don't have to haggle or look at various offers from other users. They just have to buy directly from the site. On the part of Coinmama, I hope that they don't turn into an exchange. Their appeal right now is what makes them special. They don't have to worry about having an API, and people can just go to the mobile site -- with complete functions -- instead of a buggy app. I wonder when they'll accept other convenient payment methods? I think PayPal is another good option.
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