Best Way to Convert Buy Mexican Pesos
Do you need pesos?
Do you need to convert or buy Mexican pesos? Let’s take a look…
In my previous life, I worked in the financial services sector. From first hand experience, I can tell how this $22,515.17 billion industry in 2021 (estimated $28,529.29 billion in 2025) makes most of it’s money.
- Fees
- Exchange Rates
Why is this relevant when all you want is just a glass of margarita or mojito on the beach?
Well, let’s say the glass of margarita costs you $200 MXN pesos. You may either pay for it in cash or by credit card.
Cash
If you pay for it in US dollars, typically, restaurants will accept your American currency at your cost of 10%. What I mean by this is, if the market rate of $1 USD is $20 MXN, the restaurant will accept your $1 USD for $18 MXN. So your true cost of the cold glass of margarita is $11.11 USD.
If you pay for it in Mexican pesos, that means you have to buy pesos or sell your ‘home’ currency at a bank or exchange service which will offer the same bad exchange rate for their profit. Regardless if you pay for the margarita with pesos or your home currency, your true cost is always 10-20% more than what you think you are paying. Remember the 2 ways financial services make money? We just talked about exchange rates, let’s talk about fees now.
Credit Card
You decide to pay for the margarita with your credit card. There are 2 types of fees that are relevant – transaction and service fees. Typically each foreign card transaction costs you about 2 to 3%. Not bad right? But remember, your bank still needs to buy pesos and sell your local currency for you. Every time they perform this ‘task’ for you, it is a service charge on your card. That is another 2 to 3%. Now, do you believe your bank will convert that at the market exchange rate? No. You will again be compromised with the 10% deficit rate we discussed above. Let’s be conservative and take an average of 2.5 + 2.5 + 10% and add this up. Your true cost of your glass of margarita with your bank issued card is now $11.61 or 232.20 MXN pesos. Not the advertised $10 USD or 200 MXN you thought you are paying.
True Cost
But it is only 1 drink right? Take this example and apply it to everything you purchase on and for your trip. A family trip where you pay $5000 (hotel, meals, excursions, souvenirs, your glass of margarita, etc) can have an additional invisible financial fee and transaction cost of $500-$750 that is hidden in your bank statements.
And we have not even talked about the interest rates on credit card balances of anywhere between 15 to 20%.
My Wise Advice
Hence, as an international traveller, I advise that one thing you want to prepare for is access to local currencies in advance of your trip. A free service I use and recommend is Wise. It is very helpful to avoid high financial fees and bad exchange rates.
As discussed above, banks and local exchange services either give you good fees and poor rates or vice versa. Or both.
To save money, you need to prepare in advance. Wise provides you with market rates and very nominal fees to exchange and move currencies, including Mexican pesos.
You can also get a FREE Wise MasterCard that you can use in restaurants, shops, and trips that will not charge you fees for foreign currency while getting market rates. I have used my Wise card in over 20 countries saving me hundreds of dollars in fees and exchange rates alone. That is a lot of margaritas.
If you don’t want your bank to enjoy your glass of margarita more than you do, then I recommend you get a Wise account and card. The best way to convert or buy Mexican pesos is with your Wise account and you can get yours here.
Posted by: 
Rudy Lim
