Coinmama fees: 14.2%? Hidden fee added from simplex.com?

[M604]

I'm a newbie to crypto (and investing in general). A couple of weeks ago, I purchased $1,000 worth of bitcoin from Coinmama, using my debit card. The destination address was an investment company. Apparently, Coinmama is based in Ireland, and depending on what country the customer is in, they use a third party for the actual transaction. I'm in Washington State, so for me, once I filled out the "buy" window on Coinmama, I was directed to continue to simplex.com, to execute the transaction.

The investment company told me that they only received $858 worth of bitcoin on that day. That's $142 less than what I intended. Or, as a percentage, 14.2%.

Since I'm new, I make mistakes. The Coinmama "buy" window says: "Pay this many dollars, receive this much bitcoin, prices include fees". I thought hey great, I spend $1,000, and I get $1,000 worth of bitcoin".

I knew they had some kind of fees, but I was somehow in a brain fog and in denial, partially encouraged by the deceptive-sounding "prices include fees"!

I tried to understand why I only received $858 worth of bitcoin. I looked at Coinmama's "fees and charges", and it says something about 3.9%. I tried to send them an email, but the automated response said that I need to contact simplex.com (based in Israel), probably because they're the ones who actually did the transaction. Then I looked around on the simplex.com website, to see if they charge their own fees, and apparently, they do, and there are several different numbers listed there, I didn't understand it very well:   

https://support.simplex.com/hc/en-gb/articles/360014078420-What-fees-do-you-charge-for-card-payments-

So let's say I want to do that purchase again, and this time, get the full $1,000 worth of bitcoin. Am I correct that I would have to spend $1,142 at Coinmama? A 14.2% fee?

Am I the only one with this experience, and if not, is a 14.2% fee considered normal and acceptable? Despite their website saying 3.9%?

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[Slow death]

So let's say I want to do that purchase again, and this time, get the full $1,000 worth of bitcoin. Am I correct that I would have to spend $1,142 at Coinmama? A 14.2% fee?

Am I the only one with this experience, and if not, is a 14.2% fee considered normal and acceptable? Despite their website saying 3.9%?

i use coinmama since years and every time i took $1000 to buy bitcoin using my bank card i got almost $830 in bitcoin so don't worry thinking you are the only one because i had the same problem with them several times, this is their rate and I don't think it will change, I've been shopping with them since 2017 and it was this rate, nothing has changed, last year I stopped using them because I wasn't conforming to this rate anymore

[M604]

i use coinmama since years and every time i took $1000 to buy bitcoin using my bank card i got almost $830 in bitcoin so don't worry thinking you are the only one because i had the same problem with them several times, this is their rate and I don't think it will change, I've been shopping with them since 2017 and it was this rate, nothing has changed, last year I stopped using them because I wasn't conforming to this rate anymore

Thank you, that was helpful. So it seems that Coinmama is fast and reliable, but charges high fees and is not transparent about those fees.

I just looked on this page: https://support.coinmama.com/hc/en-us/articles/360021762759-Accepted-Payment-Methods, and it says that if you use a bank card, there is a "5% Express fee". Okay, so is that IN ADDITION to the 3.9% regular fee? They don't say. But whether it is in addition to the 3.9% regular fee, or replaces the 3.9% fee, it still doesn't add up to anywhere near 14% or 15%.

What if a Coinmama customer needs to purchase a precise amount of bitcoin, for an investment transaction? Apparently, the only way to do it, is to GENEROUSLY OVER PURCHASE, and then hope you get a refund from the destination entity. Like spending $1,500 to purchase $1,000 of bitcoin.

I have another question that may be related: Somewhere on the Coinmama website, it says that the destination wallet address must be yours, and that you have full control over it, something like that. So according to that, you can't specify the wallet address of, say, an investment company, because it's THEIR address, and they control it, not you. Is that maybe part of the hidden reason I was charged 14.2%? If that's the case, then maybe I should get my own wallet (which I don't have), use that to purchase bitcoin, and then, as a separate transaction, send the bitcoin from my own wallet to the investment company. Does that sound good?

[Maus0728]

I have another question that may be related: Somewhere on the Coinmama website, it says that the destination wallet address must be yours, and that you have full control over it, something like that. So according to that, you can't specify the wallet address of, say, an investment company, because it's THEIR address, and they control it, not you. Is that maybe part of the hidden reason I was charged 14.2%?

Without a doubt, NO. One of the reasons they require non-custodial wallets for cryptocurrency withdrawals is to ensure the security of your funds. Non-custodial wallet means you have complete control over your funds, with only you knowing the seed phrase (12-24 english words) and private keys that allows you to broadcast a transaction whenever you want. Custodial wallets, on the other hand, means that the private keys are not owned by you, allowing them to "freeze" your funds as they see fit, much worse, if the exchange has been compromised or hacked. The transaction fee associated with using addresses from either a non-custodial or a custodial wallet is unrelated.

I don't use coinmama for buying and selling crypto but I have found a good old reddit post about 5 months ago with regards to their transaction fees.

First, Coinmama charges a 5.9% brokerage fee, which is already applied when the site shows you its trading prices. On top of the brokerage fee, there is also a 5% fee for credit card processing. In the end, the price you pay on Coinmama when you buy cryptocurrencies will be 10.9% above the current market price. Other exchanges are well below that.

Link to post.

[M604]

First, Coinmama charges a 5.9% brokerage fee, which is already applied when the site shows you its trading prices. On top of the brokerage fee, there is also a 5% fee for credit card processing. In the end, the price you pay on Coinmama when you buy cryptocurrencies will be 10.9% above the current market price. Other exchanges are well below that.

Link to post.

Thank you so much for your explanations. I am amazed at how hard it is to get the correct information on Coinmama fees. In your post, you already gave more correct and essential and usable information on fees than Coinmama does on their entire website. There is no way I could reconstruct the fees that you describe, from Coinmama's website. For example, the 5.9% figure does not appear anywhere on their website (unless I missed it).

But even more important than individual numbers, I feel, would be an explanation, by Coinmama, that their fees are the result of a multi-factor equation with 10 variables (or similar): then, as a beginner, you would know up front that you're dealing with a pricing concept that is complex, non-intuitive, and requires study and practice, even if Coinmama explained it clearly (which they don't). This stuff is not easy to understand: you have to find out how many variables there are, understand what they are, fill in the values correctly, and then put it all together correctly, while being knowledgeable about what part is a variable, what part is a constant, what happens when a currency other than USD is used, what happens when the destination address is a foreign country, what is the difference between paying with a credit card, or a bank account, what happens when Coinmama uses a third party like simplex.com for your transaction, do they have their own fees, and what are those, and are those fees simply added to Coinmama's own fees etc.

This is not something you might call "beginner friendly". But it gets worse, because apparently, Coinmama is used to the world beating a path to their door, so they are arrogant. Logically and practically, anything related to fees should appear during the checkout process, so you can see and know what those fees are estimated to be: but Coinmama DISAGREES, and simply leaves their customers in the dark (or even misleads them on purpose with the phrase "pricing includes fees").

If you've done this exercise 10 times, then you'll get good at it: you'll know what to look for, where to watch out for a trap, where the hidden fees are hiding, which variables come into play, what their values are, and how it all fits together. In other words, once you have MASTERED IT, why, then it's easy. I accept all of this as part of my learning curve. Thanks again for your helpful insights. The reddit link was very helpful, too.   

[LoyceV]

I've never used Coinmama, but I've used amongst others Kraken.com and would like to compare the fees: If I deposit €1000, there is no fee (a SEPA withdrawal costs €0.09).
If I exchange the €1000 for BTC, I pay either 0.16% (maker fee) or 0.26% (taker fee). That would be €2.60 at most. At 31,020 EUR/BTC, I would get (approximately) 0.03215344BTC. There's usually a few cents spread between ask and bid too, but the difference is very small.
When I withdraw, there's a 0.00002BTC fee, which means I get 0.03213344BTC in my wallet, worth €996.78 (assuming the Bitcoin price didn't change). That's a total fee of 0.322% for this transaction.
Using a "real" exchange is probably a bit more complicated, but I'd say it's well worth the effort to learn.

Note: If you would use for instance Binance, they charge you 0.0005BTC to withdraw (25 times more than Kraken), and try to trick you into accepting their own made-up tokens which they pretend are real Bitcoins. Choose wisely

[M604]

I've never used Coinmama, but I've used amongst others Kraken.com and would like to compare the fees: If I deposit €1000, there is no fee (a SEPA withdrawal costs €0.09).
If I exchange the €1000 for BTC, I pay either 0.16% (maker fee) or 0.26% (taker fee). That would be €2.60 at most. At 31,020 EUR/BTC, I would get (approximately) 0.03215344BTC. There's usually a few cents spread between ask and bid too, but the difference is very small.
When I withdraw, there's a 0.00002BTC fee, which means I get 0.03213344BTC in my wallet, worth €996.78 (assuming the Bitcoin price didn't change). That's a total fee of 0.322% for this transaction.
Using a "real" exchange is probably a bit more complicated, but I'd say it's well worth the effort to learn.

Note: If you would use for instance Binance, they charge you 0.0005BTC to withdraw (25 times more than Kraken), and try to trick you into accepting their own made-up tokens which they pretend are real Bitcoins. Choose wisely

Thank you for the info about Kraken.com, and about Binance: I've never used them, all of this is helpful.

I've used Coinbase.com before: they had low fees, and the fees were transparent and easy to understand. On the downside, it took up to 12 days for a simple transaction (buying bitcoin and sending it to an investment company). So, what I saved in fees, I had to pay in time. If you have lots of time and no deadline to worry about, maybe Coinbase is a good choice. I'll look into K̶r̶a̶n̶k̶e̶n Kraken [spelling error corrected, thank you LoyceV] and others.  Thank you.  

[LoyceV]

an investment company

Be very careful here, many people have been scammed by "investing" their Bitcoins.

I'll look into Kranken and others.

It's kraken.com. A typo is likely to get you a phishing site.

[M604]

an investment company

Be very careful here, many people have been scammed by "investing" their Bitcoins.

Yeah. It flatters the ego to think: "I'm so smart, that would never happen to me". And then it does.

I'll look into Kranken and others.

It's kraken.com. A typo is likely to get you a phishing site.

Spelling error corrected, thank you.