I’m in all the TripAdvisor and facebook groups and forums. And I’m always seeing the the same repetitive questions about money, over and over again. People, mostly of North American origin (USA), wanting to know how to change money in Peru. So, it’s worth writing a short article here to explain the basics.
Now, the big takeaway you should get from this article, is that currency exchange isn’t difficult in Peru. And it’s likely no different than what you’re used to back in the USA.
You see, most vendors in Peru in the places you’ll frequent as a tourist, take ‘tap and go’ payments with Apple Pay and Google Pay. You can just pay with your physical bank card or with a digital card on your mobile phone.
Exchanging Money In Peru – Pay With a Dedicated Travel Card – Not Cash!
What Is Better, Card Or Cash In Peru?
Believe it or not, but you’re better off paying with a card in Peru. Cash is not king in Peru. And bringing large wads of US currency isn’t going to get you a discount on anything.
In fact, it will cost you a fee of 2-3 percent (or more) to change your foreign currency into the local Peruvian Soles. And you can’t pay for goods and services in Peru with foreign currency. So, you will need to convert it.
Now, currency exchange is a business in Peru. And like any business, they don’t operate without a profit. For every $100 USD you exchange for Peruvian Soles (PEN), you’ll lose a minimum of $2-$3 USD in transaction costs.
If you choose to use a dedicated travel debit card like I do, you get to keep that $2-$3 USD. As an expat who lives in Peru, I use my Wise Travel debit card everywhere. I don’t pay with cash unless I’m making a tiny purchase, in a tiny town in the middle of nowhere.
Travel Tip: ATMs in Peru have $USD as an option. And one of my own local Peruvian bank accounts is in $USD. Bringing $USD in cash to Peru won’t give you an advantage. And it won’t save you money in Peru. Instead, everything will cost you more because you will need to convert your money in order to use it.
Is A Travel Debit Card Better Than My Normal Bank Card In Peru?
The simple answer is yes, a dedicated travel debit card is better than your normal bank card in Peru. Now, like I mentioned above, I have local Peruvian bank accounts in $USD and Peruvian Soles. These local bank accounts come with local bank cards, as do my Australian bank accounts. And I would always choose to pay with my travel debit card over my other cards.
Just like the currency exchange shops when they’re changing physical cash, banks charge you a fee in the form of a percentage on every transaction you make in a foreign currency. Even the fee free cards from standard bank accounts abroad, aren’t ‘fee free’ when you’re spending money in foreign currency.
Traditional banks hide the fee in the exchange rate. You’re still losing money every time you pay in a foreign currency. With my Wise Travel Debit Card I get the real mid-market exchange rate in Peru. Something that your regular North American or Australian bank, doesn’t give you.
North American banks tend to be in the range of 2-3% lower than the real mind-market exchange rate. You’re getting 2-3% less ‘bang for your buck’, so to speak. And Australians, I’ve got some really bad news for you. Australian banks are closer to 5% in Peru. You’re getting fleeced everytime you make a purchase in Peru with an Australian bank card.
To get the real mid-market exchange rate, use a dedicated Wise Travel Debit Card. It takes less than 5 minutes to get one online. They can be instantly topped up online from your regular home bank accounts. And they have no fees and they will give you the real exchange rate. Plus, you won’t need to stand in a line to change your cash.
Travel Tip: Always use a dedicated WISE travel debit card to pay in Peru. Don’t use a regular foreign bank card to pay in Peru.
Hidden Transaction Costs For Cash Purchases In Peru
Now, if you’re one of those people that I need to respond to each and every day, on forums like Tripadvisor, that asks the same repetitive money questions that 50 or more other people have asked, you’re going to get fleeced with cash in Peru.
You’ll likely be expecting everyone to have change or to be able to make change every time you try to pay for something with cash. But guess what? They’ll all tell you ‘no tengo cambio’ or ‘I don’t have change’.
On top of losing 2-3% or more every time you change your cash into Peruvian Soles, you’ll also be rounding up every time you pay for something in cash in Peru. Because the Peruvians are slick. They will all tell you that they don’t have change. And you’ll be paying extra in cash for everything you buy.
You’ll be essentially tipping anyone and everyone whom you buy something from. Want a can of beer that costs s/6 but you only have a s/10 note? Well, ‘no tengo cambio’. And now you’ve tipped the convenience store guy. Want to take a cab that costs s/7 but you only have a s/50 note? ‘no tengo cambio’ and now you’ve paid s/50 for a s/7 cab ride. You get the idea.
Basically, everytime a Peruvian in a touristic area sees a tourist with wads of cash, they’ll be looking to take as much of it from you as is possible. You’ll get fleeced and end up tipping for things that nobody else ever tips for. Tipping isn’t common in Peru. But the Peruvians all know that you, the foreign tourists, don’t bother reading articles like mine about ‘tipping in Peru‘ and educating yourself before traveling.
Travel Tip: Read my article about payment and tipping in Peru. So you don’t spend far more on your holiday to Peru, by tipping in places where its not common to tip. And get yourself a Wise Travel Debit Card before you come to Peru!
