Markets and Trade, Mexico Essentials, Money

A Fair Exchange

Currency Exchange in Mexico

Currency exchange is big business, so it’s no wonder every major world airport features a cornucopia of money changers touting to exchange your currency.

Mexico’s economy is still heavily cash-based and many goods and services must still be paid in cash with Mexican pesos, especially in smaller towns and villages, and places off the beaten track.  So you’ll need get hold of some cash while you’re in Mexico.

Fortunately, Mexico is one of the best countries for transacting retail currency exchange.   The exchange rates are attractive, the commission charges are low (and usually non-existent) and the ‘spread’ — the difference between the buy rate and the sell rate — is invariably reasonable.

Mexico’s foreign exchange houses willingly accept US dollars as well as a wide range of other currencies and offer good rates on all of them.  If your home country uses Canadian dollars, the euro, the British pound, the Swiss franc, the Australian dollar or the yen, there is no point in buying US dollars at home to exchange them into pesos in Mexico: good rates are offered on these currencies locally.

If you are leaving Mexico and have Mexican pesos to sell back into your home currency, it’s much better to do this in Mexico than in e.g the US or Europe.  Exchange booths at Mexican airports offer good exchange rates when you are selling pesos and most hold stocks of all major world currencies, including US and Canadian dollars, British pounds, euros, and yen.

While traveler’s checks are still accepted at some banks and exchange houses, an increasing number of places are ceasing to accept or trade them: the widespread use of ATMs, pre-paid debit cards, and credit cards are rendering traveler’s checks obsolescent.

The age of the ATM is here and Mexico is awash with them.   Even the small towns have one these days; they are convenient and you don’t even need to worry about whether the teller will be able to speak your language.

The main point to note about ATM use in Mexico with a foreign bank card is that you will get charged at least twice: once for use of the machine abroad, and once again for the ‘currency exchange fee’ which most banks impose: the norm appears to be 2.5%-3.5%.  Check with the financial institution that issued your card to find out what you’ll be charged. Due to the charges, it’s sometimes better to withdraw, for example, US$200 worth of pesos than US$50 worth.

In Summary:

  • The least expensive way to exchange your currency in Mexico is using cash. Exchange houses in Mexico accept all major currencies, not just US dollars.  Cash, however, carries the risk of being subject to unforeseen loss.  Some travel insurance policies cover lost cash but never for amounts above a couple of hundred dollars;
  • The most expensive way to trade your currency is to buy US dollars in your home country (if not the USA) and then buy pesos with those dollars when you get to Mexico;
  • The convenient way to exchange your home currency for pesos is to use an ATM card, with funds drawn down from a debit card linked to your checking or savings back home; pre-paid debit cards are also available from some banks. Rates for use of these cards in Mexico vary by financial institution so check with them before you travel;
  • While traveler’s checks are still accepted at some places in Mexico, they are becoming increasingly difficult to cash, exchange rates might not be as attractive, and it’s often time-consuming to exchange them.

See Also: A Tale of Two Airport Exchange Rates

You can find lots of additional practical advice about managing travel money to your best advantage in Mexico on our Money in Mexico Guide.

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11 Comments

  1. Geoff says

    Travelling through Mexico in March this year. Are Australian dollars accepted at bank foreign currency exchanges?

    • Mexperience says

      Hi Geoff,

      You *might* find a booth at Mexico City’s airport who will exchange them (the AUD is not posted, you’ll have to ask at the counter), but generally only USD, CDN, GBP and EUR are readily exchange-able at kiosks in Mexico.

      Some banks may exchange AUD, but the hassle factor may be considerable. Best to use ATMs in that sense.

  2. B. Berrie says

    We have to pay our rent to the owner of the house when we arrive in Mexico and we are driving from Canada, I am nervous about having that much cash with me while driving through Mexico for 4 days, how much cash can you get from Exchange houses at one time? would they give me $ 2000 US Dollars from my Canadian Debit Card? And where are these Exchange houses located or called? We will be in the Merida/Progreso area of Yucatan.

    • Thom says

      Check with the local exchange houses (casas de cambio) to ask how much they will exchange in one transaction. Take some ID with you, e.g. passport. Also, why not ask your landlord if he/she will accept your USD in cash? If so, agree an exchange rate that’s reasonable for both of you.

  3. Rod says

    What about changing pesos back to USD or other currency when it’s time to leave?

    • Mexperience says

      Hi Rod, thanks for your question. In our experience, it’s much better to sell your Mexican pesos in Mexico than States/Europe-side. We’ve updated the article to comment on this aspect.

  4. B.Buckman says

    Wow! Helen, your proposal includes plenty of variables not the least of which is finding that ‘trusted friend’. Then, the postal money order, which will probably arrive with no problem but when? When one is waiting for living money the Mexican postal system will seem like the pony express. And, will these money orders arrive consistently, say, over the course of a year or two or more? Don’t know what to say about a postal box versus home delivery. Maybe a box would be better since, at least, it eliminates one last leg of the delivery system where mail might be lost or mislaid.

    I really don’t mean to bad mouth the Mexican postal system unduly. I have been foolish enough to send cash to and from Mexico over the years and have never lost a dime. However, I have heard many horror stories from others so I would not recommend relying too heavily on the post office when it comes to money.

    Helen, if you do hit on a reliable method for receiving money from the States please post it here, I’m sure many readers will be interested.

    • Mary David says

      All of the mail in Mexico is routed through Mexico City, no matter if you live in the Yucatan or Tijuana. I am going into the second month of waiting for a $300 refund on shipping costs to come to me from Hawaii. Someone I sent a check to in Hawaii has waited a month for it to arrive. I have really had variable success with the Mexican postal service but it just seems less reliable. PayPal many work better to send/receive $$ to/ from the US. FedEx or UPS are more reliable but clearly more expensive. My wallet was stolen from my purse at the Home Depot here one Saturday and I had a replacement Bank of Hawaii credit card by Tuesday and my Central Pacific Bank debit card on Wednesday via FedEx. And because of the kind of account I have with CPB, I’m not charged foreign exchange fees when I use the Banorte ATM here.
      Last year, I had to send money via Western Union to the US. That was quite an experience as Mexican banking laws make it much more difficult to send money out of Mexico by Western Union than to receive it from the US. But it is not difficult to receive money from the US by Western Union and they have kiosks at plenty stores here.
      BTW, a close friend of mine once worked for the main post office facility in LA. She told me that theft of cash mailed via USPS was rampant there. So it may not always be the Mexican system at fault.

  5. Helen says

    I wonder if it would make sense to have a trusted friend make withdrawals in the US and send me the money by postal money order. Immigrant families use this method to send money home. Do I need a post office box in Mexico to receive it? Is home mail service secure?

  6. Matt says

    Hi B.,
    My bank charges a fixed fee (about $5) in addition to the 3%, and if this is the case for an account you hold (like mine) then withdrawing larger amounts makes sense. For example, if I withdraw US$100 worth, my charge is $8. If I withdraw $500 worth my charge is $20. If I withdraw 5x$100, my charge is $35.
    It all depends on the fee structure of the account — detailed in the small print as usual.

  7. B.Buckman says

    Regarding the idea that it is better to withdraw larger amounts from ATMs rather than smaller amounts to save on bank fees, while this is true for the ATM machine usage fees, it does not help on Foreign Exchange Transaction fee. This fee is a flat 3% (BOA) on any withdraw.

    In my opinion the FET is totally unfair to expats who are on low, fixed incomes. If it applied only to tourists or wealthy people who come to Mexico for three months during the winter it would not be so objectionable. We who are withdrawing living expenses year round, year after year, are the ones impacted the most by this surcharge.

    Ah, for the good days when the best way to change dollars for pesos was to drop by any PEMEX gas station, no fuss, no muss.

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