Owais Crawford
Iceland is a largely cashless society, with most establishments accepting card payments. The official currency of Iceland is the Icelandic króna (ISK), but many places, including restaurants, bars, and tourist attractions, will accept US dollars. However, once you leave the airport, the number of merchants accepting US dollars becomes extremely limited. It is recommended that you exchange your currency at the airport or in Reykjavík before heading to more rural areas, where it will be harder to find banks.
| Characteristics | Values |
|---|---|
| Currency in Iceland | Icelandic króna (ISK) |
| Currency exchange at the airport | Possible at Keflavík Airport |
| US Dollars in Iceland | Not accepted as a form of payment |
| Using cards in Iceland | Widely accepted |
| Cash in Iceland | Rarely used |
| Tipping in Iceland | Not expected |
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What You'll Learn
US dollars can be exchanged for Icelandic króna at Keflavík Airport
Iceland is a very card-friendly country, and you can use your credit or debit card almost everywhere. However, if you prefer to carry cash, you can exchange US dollars for Icelandic króna at Keflavík Airport.
Keflavík Airport is relatively small, so finding the ATM or bank branch should be easy. Once you exit the baggage claim area, you will be in a small reception area where you can pick up a rental car or shuttle into Reykjavik. This is the area where you will find the ATM. There is also a bank at the airport, Arion Bank, located in the arrivals hall. You can also exchange currency at the desk in the departures hall.
It is worth noting that airport kiosks tend to have significantly weaker exchange rates, sometimes up to 10% weaker. It is recommended to exchange all the currency you need for your stay before leaving the airport or Reykjavik if you are heading to more rural areas where it will be harder to find banks.
If you are driving in Iceland, it is a good idea to make the airport ATM one of your stops before the Ring Road. You can figure out how much Icelandic currency you will need for your trip and take out that amount at the airport ATM. There will be a small fee for withdrawing Icelandic money from the ATM, so it is better to withdraw a larger sum of money all at once than in lots of smaller transactions.
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The airport's exchange rates are unfavourable compared to other methods
While US dollars are accepted in almost all places in Iceland, it is not recommended to rely on this. The Icelandic króna (ISK) is the official currency of Iceland, and it is the only legal tender in the country. Therefore, exchanging your currency for Icelandic króna is necessary.
The airport exchange rates are unfavourable compared to other methods. Airport kiosks tend to have significantly weaker exchange rates, sometimes up to 10% weaker than the real mid-market exchange rate. This is also true of banks, currency exchange kiosks, and some hotels. Therefore, it is recommended to exchange only a small amount of money at the airport, just enough to cover immediate expenses like bathroom fees or small purchases.
There are several alternative methods to obtain Icelandic króna that offer more favourable exchange rates. One option is to use a travel card, such as Wise, which offers multi-currency accounts and allows you to exchange USD to ISK at or near the real mid-market exchange rate. With Wise, you can access your Icelandic kronur instantly in your digital wallet and then use your debit card to withdraw from an Icelandic ATM. Additionally, ATMs in Iceland will treat you like a local if you use a travel card, avoiding currency exchange altogether.
Another option is to use a service like Revolut, which allows you to exchange currency instantly and access Icelandic kronur in your digital wallet. You can then withdraw cash from ATMs in Iceland as needed. It is generally recommended to use ATMs attached to banks rather than standalone machines, as the latter may apply weaker exchange rates.
Furthermore, Iceland is a largely cashless society, and credit and debit cards are widely accepted. Therefore, you may not need to carry large amounts of cash during your trip. However, it is always a good idea to have some cash on hand, especially when visiting smaller establishments or rural areas.
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Icelandic króna can be withdrawn from the airport's ATMs
Iceland is a largely cashless country, with most locals opting to pay for goods and services by card. However, it is still a good idea to carry some cash with you, as smaller or independent establishments may only accept cash. Icelandic Króna (ISK) is the official currency of Iceland, and it is best to pay in the local currency wherever possible. While some tourist-facing businesses may accept US dollars, this is not guaranteed, and you will likely receive an unfavourable exchange rate.
ATMs are a convenient way to obtain Icelandic Króna. There are several ATMs at Keflavík Airport, which can be used to withdraw the local currency. It is recommended to use an ATM that is attached to a bank, rather than a standalone machine, as these often have weaker exchange rates. There will likely be a small fee for withdrawing money from an ATM in Iceland, so it is best to withdraw a larger sum at once.
If you are planning to use a card to withdraw money from an ATM, it may be worth looking into a travel card, such as Wise. These cards can give you access to multi-currency accounts, allowing you to exchange USD to ISK at a favourable rate, and withdraw the money from an Icelandic ATM without incurring additional fees.
It is worth noting that bathrooms in Iceland often charge a fee for entry, and some will accept card payments, so having a small amount of cash on hand can be useful for this purpose.
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Credit and debit cards are widely accepted in Iceland
Visa and Mastercard are the major credit cards in Iceland, and both are serviced by all banks in the country. Electron and Maestro cards are also commonly accepted, and Apple Pay and Google Pay are widely accepted. American Express is not widely accepted, although you may be able to use it in some high-end hotels and restaurants.
It's worth noting that while you can use your card in most places, smaller or independent establishments may have cash-only policies, and you may need cash for small businesses, markets, street vendors, public transportation fares, and some rural areas. Therefore, it's a good idea to carry some cash, just in case.
If you need to withdraw cash, you can use your debit card at an ATM, although be aware that dynamic currency conversion may be applied, resulting in additional fees and unfavourable exchange rates. ATMs attached to banks are generally considered safer than standalone machines. You can also exchange currency at a bank branch, although this may be expensive, with high exchange rate margins.
If you're travelling via Keflavík Airport, there is a bank and an ATM where you can exchange currency or withdraw cash. However, airport kiosks tend to have significantly weaker exchange rates, so it may be more cost-effective to exchange a small amount of currency at the airport to cover initial expenses and then exchange the remainder of your funds elsewhere.
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Some establishments in Iceland may only accept cash
Iceland is known for being one of the most cashless societies in the world. In almost all places in Iceland, you can use the US dollar or the euro. However, some smaller boutiques and stores may not accept them. The stores and hotels that do accept US dollars and euros set their exchange rates, and you may sometimes end up paying more than you would in Icelandic króna.
While credit and debit cards are widely accepted, you may need cash at small businesses, markets, street vendors, public transportation fares, and some rural areas in Iceland. Most restaurants in Iceland accept debit and credit cards for payment. It is common for establishments to display the logos of the types of cards they accept, such as Visa and Mastercard, which are the most widely accepted. However, it is always a good idea to carry some cash, as smaller or independent establishments may have cash-only policies.
If you prefer to carry cash, there is a bank and an ATM at Keflavík Airport where you can exchange currency. However, you might be charged an international fee for ATM withdrawal, so check beforehand with your bank. It is best to use ATMs attached to a bank rather than a standalone machine, as the latter has been known to apply weak exchange rates.
If you are going to be travelling outside of the Reykjavik area and want to have cash, it is recommended to withdraw Icelandic currency at Keflavík Airport.
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Frequently asked questions
The Icelandic króna (ISK) is the only legal tender in Iceland. However, many places, including restaurants, bars, and tourist attractions, will accept US dollars.
You can exchange currency at Arion Bank in the arrivals hall or at the desk in the departures hall at Keflavík International Airport.
Yes, you can use the airport ATM to withdraw Icelandic króna. However, be aware that airport kiosks tend to have significantly weaker exchange rates, sometimes up to 10% weaker.
Yes, it is advisable to exchange all the currency you need for your trip before leaving the airport or Reykjavík, especially if you are heading to more rural areas where it will be harder to find banks.
Yes, you can exchange currency at any Icelandic bank branch. However, exchanging currency at a bank may be expensive, with exchange rate margins between 4% to 7%.
