New expats and even long-term expats in Mexico often need to convert foreign currency to Mexican pesos for their expenses. So, how do you convert foreign currency to Mexican pesos?
While many establishments accept credit and debit cards, some local shops and vendors do not. For day-to-day expenses in Mexico, you will need to have some cash in Mexican pesos.
Best currencies to bring into Mexico
While expats can bring different foreign currencies into Mexico in cash, not all can be easily exchanged for Mexican pesos.
U.S. dollars are the best foreign currency to bring because you will not have a problem exchanging them.
Other popular currencies include Canadian dollars, Euros, and British pounds. For example, I found it difficult to find a place in Puerto Vallarta that exchanged Australian dollars, and when I did, the exchange rate was poor.
Some establishments in tourist areas may accept cash payments in U.S. dollars. However, due to unfavorable exchange rates, you will usually be better off paying in Mexican pesos. In general, most places will require you to pay in Mexican pesos.
About Mexican pesos
Here are a few things to note about the currency of your new home:
- The currency code of the Mexican peso is MXN, and the currency symbol is $, which is the same as U.S. dollars.
- The currency note denominations are MXN 20, MXN 50, MXN 100, MXN 200, MXN 500, and MXN 1000. The MXN 1000 notes are rarely seen.
- The coins include MXN 1, MXN 2, MXN 5, MXN 10 and MXN 20, as well as cents, which are rarely used. Remember that the MXN 20 coins can be easily confused with the MXN 10s.
- The current MXN-to-USD exchange rate is around MXN 20-to-USD 1.
Ways to convert foreign currency to Mexican pesos
Let’s look at some ways you can get Mexican pesos:
1. Buy Mexican pesos before visiting Mexico
Buying Mexican pesos ahead of traveling will save you the hassle of exchanging money in Mexico. This is especially handy when making your first trip.
Depending on where you are from, to purchase Mexican pesos, go to your bank or a currency exchange. There are other currency exchange services that allow you to order currency online and pick it up or have it delivered to your location.
Keep an eye on the exchange rate in advance so you don’t miss out on a good deal.
However, many prefer not to carry large sums of money. If that is the case, you can bring a small amount for your immediate expenses after arriving in Mexico, and until you can get more money.
For any reason, if you are bringing over US$10,000 in cash or cash equivalents, you will need to declare it at Mexican customs. Refer to the Mexican tax office, Servicio de Administración Tributaria for more information.
2. Use a currency exchange (Casa de Cambio) in Mexico
Currency exchanges at airports and hotels are convenient, but they usually have unfavorable exchange rates. Unless you must exchange cash at these places, consider visiting a currency exchange elsewhere.
Generally, cities have several currency exchanges to choose from. The exchange rates can vary between different establishments, so shop around for the best rate.
Remember to count your money before leaving the currency exchange. If there is an issue, address it before you leave the premises.
3. Exchange money at a bank in Mexico
You can exchange currency at some Mexican banks. However, the banks can be crowded due to the ongoing COVID safety measures, so expect long wait times.
In Mexico, the amount in cash a foreigner can exchange at currency exchanges and banks is limited to US$1,500 a month. You will need your passport to exchange money. Do not forget to take undamaged currency notes.
4. Use a local ATM (Cajero Automatico) to withdraw money
Local ATMs are a convenient and popular way for both expats and visitors to withdraw money in Mexican pesos from foreign banks.
ATM withdrawals can be ideal if you have a fee-free foreign card and decline the machine’s dynamic currency conversion offer (that is, the ATM’s guaranteed exchange rate offer with a usually hefty markup).
In addition to the dynamic currency conversion, ATM withdrawals can also be pricey if your card has high foreign ATM fees and foreign transaction fees.
For all about handling ATM fees, read our article, “How to Minimize ATM Fees in Mexico.”
Remember to take safety precautions when withdrawing money from ATMs at banks. Cover the pin pad, and be aware of your surroundings.
5. Open a local bank account to transfer money from overseas
Many expats in Mexico have local bank accounts. That way, they can conveniently transfer money from their home country, or somewhere else, to Mexico, and withdraw Mexican pesos at no cost.
Usually, you will need to be in Mexico to open a bank account, and permanent residents have more bank account options than temporary residents.
You can transfer money to your Mexican bank account from your home country using an online platform or directly from your bank at home. Make sure to compare the exchange rates, fees and transfer limits, depending on your requirements. For large transfers, talk to your bank.
For more information on opening bank accounts in Mexico, read our article, “How to Open a Bank Account in Mexico.”
6. Use a debit or credit card
Using foreign cards is convenient and it can be cost-effective depending on your cards’ fees. If you are ever offered the option to pay in your home country’s currency, you can avoid the poor rate by rejecting it (like at the ATM) and paying in Mexican pesos.
If you open a local bank account, you can get a local debit card. To get a local credit card, however, you will need to build up some credit history.
Credit cards are safer to use than debit cards because if your credit card is compromised, you will not lose money from your bank account. And credit cards may offer superior fraud protection. Stay on top of your transactions to spot any unusual activities.
7. Use a money transfer company with local agents
There are money transfer services that allow you to send money from abroad to local agents in Mexico, such as supermarkets and convenience stores, for pick-up.
When choosing such a service, remember to double-check with them if you can send money to yourself in Mexico, the limits and the requirements for pick up.
You can also send money to bank accounts through these services.
Other useful tips
- Nowadays, travelers checks are rarely used, so exchanging them can be difficult.
- Avoid carrying large amounts of cash in everyday life to be safe.
- When selecting how much money to bring into Mexico or keep in your home country, consider the currency depreciation of both currencies.
- Get professional advice as needed for managing money and assets in multiple countries, tax residencies, taxes, and other concerns, depending on your situation.