Can I Use US Dollars in Mexico? New Currency Rules Mean Some Dollars are Being Rejected


“Can I pay with US Dollars in Cozumel, Mexico?” is a frequently asked question for sure! While the simple answer is “Yes!”, new foreign currency exchange rules in all of Mexico mean that torn, stained, and worn United States bills are being utterly rejected by Mexican banks, currency exchange houses, and businesses. This equally applies to other foreign currencies, as well.

Nowhere in Mexico is the ability to use US Dollars more important to the local economy than in Cozumel, even more so than Playa del Carmen and Cancun. Not only do we receive vacationers and scuba divers who stay for several days at a time, but most visitors come in from the United States on cruise ships and are only here for a few hours, one day at a time. Cruise ship visitors are highly unlikely to exchange US dollars for pesos from their banks at home since they are here for such a short period of time. It is naturally much more convenient for them to pay for food, services, and retail items in dollars while in Mexico rather than take the time to exchange dollars for pesos or find an ATM and hope that their bank back home doesn’t cut off the use of their debit card for a suspicious foreign transaction.

New Currency Exchange Rules in Mexico Mean Some Dollars are Being Rejected

In late March of 2019, Mexican banks and foreign currency exchange businesses began rejecting US dollars of all denominations with even the slightest defect. Meaning that we could no longer exchange these bills or even deposit them into our Mexican bank accounts. These rules apply to all Mexican businesses, so we cannot use torn, worn or bills with even the slightest stain, ink or writing on them at another business that accepts dollars either. This cash becomes useless to us unless we can find an American client willing to bring us mint-condition bills in exchange for our slightly used dollars.

Here are just a couple of examples of the U.S. bills we’ve had rejected by our Mexican bank when the new policy went into place:

Paying with US Dollars in Mexico - No Stains, Marks or Tears

This $50 US note was rejected by a Mexican bank for this very light red smudge.

Paying with Dollars and the Foreign New Currency Exchange Rule in Mexico

This $20 bill was rejected by our bank for a very common, small ink stain.

The first week of these new foreign currency rules and transaction laws have been absolutely miserable for both tourists and Mexicans, especially if they’re even remotely related to popular foreign tourist areas or attractions.

We work very hard to make sure that scuba diving with ScubaLuis is, above all, convenient, safe and fun. We want you to RELAX while you are vacationing in Cozumel and spending your precious time with us. Part of that service has always meant that we accept payment in both Mexican Pesos and in U.S. dollars. We understand that going to a currency exchange business takes up your valuable time and that foreign ATMs can be a mixed bag of luck and finances, too.

While many businesses in Mexico are now starting to simply refuse less-than-perfect US dollars (and other foreign currencies), we understand this convenience and have always worked to best serve our customers. We accept that our time and the cost of converting dollars into pesos (there’s always a foreign transaction fee) is just a cost of doing business.

We will continue to take US dollars, provided they are completely clean, are not stained, stamped or written on, have no tears or are overly worn. The fewer bills, the better. In general, if you have a question whether a bill might be rejected, it’s safe to say that you probably cannot use them in Mexico any longer.

So, should you use dollars or pesos while on vacation in Mexico?

Undoubtedly, cash is king throughout Mexico!

Mexican Banks and Businesses Not Accepting Some US Dollars

A sign at a Cozumel currency exchange business. Image credit: Catherine Smith de Bellato

As a visitor, you will ALWAYS get the best price when paying for anything in Mexico in CASH and without a “factura” (an official government receipt). Credit card merchant fees (what the bank charges to accept debit and credit card payments) and government taxes on credit card transactions are STEEP here.

To get the very best prices and avoid any misunderstanding over rejected cash money with hotels, stores, restaurants or service providers in Mexico, always pay in Mexican pesos; the bills are not subject to same conditional rules either.

It’s perfectly legal for a Mexican business to set their own exchange rate if they offer you the courtesy and convenience of paying in a foreign currency. They also do not have to accept any currency other than Peso, the national currency of Mexico.

In order to get the best exchange rate while paying cash, you should withdraw pesos from a Mexican bank’s ATM. These “cajeros” are safe, are harder to “hack” than unprotected ATMs on the street, and are generally more reliable. Additionally, you will get the day’s current official exchange rate rather than an arbitrary and unfavorable “tipo de cambio” a Mexican business wants to give you. I’ve seen some exchange rates in local businesses as low as 13 MXN to 1 USD while the official FOREX rate floats around 19 Mexican pesos to 1 US dollar. Think about that! You could be losing about 30 cents for every dollar you spend in these situations.

Just don’t forget to call your bank and let them know that you are traveling to Mexico and might need to use an ATM while you’re here.

We are doing our best to serve our scuba diving customers and Cozumel charter boat clients. Great customer service starts with communication and we appreciate your understanding.

Source: Scuba Luis

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