PAYING WITH PESOS
Don't be confused by Mexican pesos when traveling to Cancun! Just a few hot tips from Carlos Fiesta will help you on your way to becoming an informed consumer in the Yucatan Peninsula.
WHEN TO PAY WITH PESOS
Today's Mexico travelers usually have the option of paying for services in U.S. dollars or Mexican pesos. Virtually all businesses in Cancun accept U.S. dollars. Most people visiting Cancun never even use the local currency and pay for everything with U.S. dollars.
If there is any advantage to paying with pesos in Mexico it would be to avoid the cost of converting dollars to pesos charged by the vendors. Although U.S. dollars are welcome in Mexico by all businesses the vendor accepting the U.S. dollars will usually convert the price of the product or service from pesos to dollars using an exchange rate that compensates them for accepting the currency. These exchange rates are generally fair, but not as competitive as the exchange rates at the local banks.
As an example if a traveler sees an item for sale for 100 pesos the vendor may only give the buyer an exchange rate of 9.5 pesos for every dollar being exchanged. It is possible that the buyer could have obtained an exchange rate of 10 pesos for each dollar if he or she took the time to go to the bank to exchange dollars for pesos. So by choosing to pay the vendor with U.S. dollars and accepting the less favorable exchange rate the consumer actually pays about 50 U.S. cents more for the 100 peso product or service than had he paid in pesos. Not a big deal. It starts to make sense to pay in Mexican pesos when the amount of money being spent becomes significant. Purchases of several hundred dollars might justify going to a bank for the more competitive exchange rates. But for the average traveler just in town for a short time it's not usually worth the trouble.
HOT TO CONVERT PESOS TO DOLLARS
Converting the price of a product or service from Mexican pesos to U.S. dollars is easy. It's so easy in fact you probably won't even need a calculator.
Much of the simplicity of converting pesos to dollars stems from the fact that the current exchange rate between these two currencies is close to 10 to 1. In other words 10 Mexican pesos are worth about 1 U.S. dollar. So as a consumer in Mexico all you need to do is drop the last digit in the peso cost and you now have the dollar cost.
As an example if the current exchange rate is 10 to 1 then an item costing 100 pesos will cost 10 U.S. dollars. You don't need to be a rocket scientist to figure that out. But when the exchange rate is not exactly 10 to 1 a slight adjustment must be made for a more accurate conversion. This also can be done without a calculator (unless you have been drinking). As an example if an item costs 100 pesos and the exchange rate is 9.5 (pesos for each dollar) you will now need to add about 5% more to your conversion to dollars. So an item priced at 100 pesos will now cost you 5% more than the 10 to 1 rule. So expect to pay about $10.50 for the same item at the new exchange rate.
Converting Mexican pesos is fun and it's a great way to impress the girls. Just remember to drop the last digit off of the peso price and then add a tick to the dollar amount if the exchange rate falls below 10 to 1. Easy!
TODAY'S PESO EXCHANGE RATE
The world currency markets change every day. And to some degree so does the exchange rate between U.S. dollars and Mexican pesos. But the daily fluctuations in these two currencies is usually minimal, and is not generally reflected in the exchange rates from the individual vendors. The exchange rate does fluctuate daily, however, with banks and Casas de Cambios (exchange houses). Exchange rates at banks are usually the most competitive, with Casas de Cambio a little less competitive.