Iceland is as close to cashless as any country gets - cards work for a 600 ISK hot dog and a rural toilet. Withdraw at Arion or Islandsbanki machines if you need notes at all, always decline conversion to your own currency, and do not tip.
- You may not need cash at all. Cards and phone wallets work for street food stands, public toilets, rural parking meters and small museums.
- If you do want notes, use Arion Bank or Islandsbanki machines and avoid the independent ATMs in high-traffic tourist streets.
- Decline dynamic currency conversion every time - it carries a markup of roughly 5% to 8% over the mid-market rate.
- Tipping is not a thing. Service and VAT are already in the listed price, and leaving a tip is mildly awkward rather than generous.
- Do not buy bottled water. The tap water is unchlorinated spring water and better than anything in a bottle - it is the one purchase locals will quietly judge you for.
Money and paying for things
Iceland uses the Icelandic krona (ISK).
- You may not need cash at all. Cards, Apple Pay and Google Pay are accepted essentially everywhere - street food stands, public toilets, rural parking meters, small museums. Many travellers finish a two-week trip without touching a banknote.
- If you do want cash, use the bank-operated ATMs in the Keflavik arrivals hall or in town: Arion Bank and Islandsbanki. Avoid the independent machines in high-traffic tourist streets, which add their own surcharge.
- Decline dynamic currency conversion, every time. If an ATM or a card terminal offers to charge you in your home currency, that conversion carries a markup of roughly 5% to 8% over the mid-market rate. Always choose to be billed in ISK.
- Do not change cash at the airport kiosks. Their spread runs 5% to 8% against the mid-market rate. With cards this universal there is no reason to buy krona in notes.
- Tipping is not a thing. Service and VAT are already in the listed price in restaurants, bars, taxis and hotels. Nobody expects a tip and leaving one is mildly awkward rather than generous.
What things cost
| Item | Typical price |
|---|---|
| Espresso or cappuccino | 600 to 900 ISK |
| Hot dog (pylsa) from a stand | 600 to 1,000 ISK |
| Sandwich and drink at Keflavik | 2,000 to 4,000 ISK |
| Main course, casual restaurant | 3,000 to 6,000 ISK |
| Single Straeto bus fare | 690 ISK |
| Bottled water, 1 litre | 250 to 500 ISK |
Do not buy bottled water. The tap water is unchlorinated spring water and is better than anything sold in a bottle. Buying it is the one purchase locals will quietly judge you for.
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