Last updated on January 22nd, 2018 at 09:40 am
One of the first services I’ve ever reviewed on 99Bitcoins, back in January 2014, was Coinmama. What was special about it back then is that it allowed you to buy Bitcoins with Western Union. Recently I’ve decided to revisit the site an saw that a lot has changed for Coinmama, so you can call this a renewed review of the service.
Goodbye, Western Union. Hello, credit cards!
One of the major changes in the Bitcoin industry throughout 2014 is how easy it has become to buy Bitcoins with a credit card. This is mainly due to the fact that companies like Simplex have allowed exchanges and brokers to verify users with less risk, thus allowing the acceptance of credit cards.
This is a much welcomed change since without this you’d be bound to the old methods of actually going to your local Western Union counter and depositing money. Coinmama integrates Simplex in its system and allows you to pay with any Visa or Mastercard you might have.
Fees are lower thanks to credit cards
Since the process has become much more advanced, the fees are lower as well. Just so you’ll get a perspective: before the change to credit cards was made, one Bitcoin would cost you $310 when the corresponding Bitstamp rate was only $257. That’s a whooping 22 percent fee. Ouch!
After changes were implemented fees are around 6.5%. Now that may still sound like a lot, but if you look around at companies selling you Bitcoin with credit card as a payment method you’ll see that it’s basically the same fee everywhere. This is due to expensive measures these companies have to deploy in order to avoid fraud and chargebacks.
“We’re aware that the current commission can be considered pretty high to the average customer and we’re constantly looking for ways to lower it in order to give our customers more value for their money.”
Nimi, Coinmama’s CEO
You get your Bitcoins instantly, of course
Last thing that gets dramatically improved is the speed at which you get your coins. In the past you’d have to wait for a wire confirmation to arrive from Western Union. Today, as soon as your payment has cleared, you can withdraw your coins, which is completely awesome.
This is crucial, since sometimes a day or two can mean wide price fluctuations in Bitcoin and you end up buying coins for more or less than you intended. Keep in mind that for first time users there is a limit on how much you can buy (at the time or writing this limit is $5000).
What does the reddit community think of CoinMama?
As always I make sure to cross reference my review with Bitcoin’s subreddit and the Bitcointalk forum. I’ve been looking around the web to try and find other reviews of Coinmama, but all I found on Reddit was this thread, which has several users saying they are happy with the site.
Going through Bitcointalk I couldn’t find any more useful information, except for one post stating that the site is not that well-known and another one stating it has high fees (this was before the change to a lower fee structure).
Hands-on tutorial: How it’s actually done…
If you’re considering using Coinmama, I made a short screen capture of the whole process to help you out.
Conclusion – Would I use Coinmama?
The short answer is yes. It is a reputable company with the only downfall being its high fees. Unfortunately, this can’t be avoided when using a credit card at the moment.
The long answer is “it depends”. If you have the option to use a different payment method other than a credit card then I’d avoid paying the high fees and go elsewhere.
All in all, the service is solid and hopefully will become more affordable in the near future. If you’ve had your own experience with Coinmama, I’d love to hear it in the comment section below.
January 2018 update – These days, due to high demand on all exchanges Coinmama is also suffering from extended transaction delays and long verification processes. I suggest reading the comment section to get an idea of what issues may arrise before making a decision.