Currency in Madeira Island: Paying, ATM; Exchanging money, etc…

The Official Currency in Madeira

What is the Currency?

Planning your finances for a trip to Madeira is refreshingly simple. As an autonomous region of Portugal, the island uses the same official currency as the mainland and most of the European Union: the Euro. The currency is designated by the code EUR and the symbol €.

You will encounter the Euro in the following standard denominations, which are used for all transactions:

• Coins: 1 cent, 2 cents, 5 cents, 10 cents, 20 cents, 50 cents, €1, and €2.
• Banknotes: €5, €10, €20, €50, and €100. While larger notes like €200 and €500 are legal tender, they are very rare in daily circulation and may not be accepted by smaller shops or restaurants due to a lack of change. It’s best to stick to notes of €100 or less.

A Note for Non-EU Visitors

One of the most common questions from first-time visitors is whether they need a special or different currency for the island. The answer is no. You do not need to find a “Madeiran Euro” or any other local currency; the standard Euro is all you need for your entire stay.

If you are traveling from another country within the Eurozone (such as Spain, France, Germany, or Italy), you are all set. You can use your existing cash and cards directly without any need for currency conversion, just as you would at home.

Getting Cash: Using ATMs in Madeira

ATM Availability and Locations

Finding an ATM in Madeira is generally straightforward, especially in populated areas. The local ATM network is called Multibanco, and these machines are ubiquitous in Funchal and other main towns such as Machico, Santa Cruz, and Calheta. You can find them at banks, inside shopping centers, and often as standalone kiosks on the street.

However, once you venture into the island’s smaller villages or more remote rural and mountainous regions, ATMs become significantly scarcer. It is wise to adopt the habit of withdrawing enough cash for your day’s needs while you are in a larger town before heading out on a hike in Madeira’s stunning landscapes or a drive to a secluded spot.

Choosing the Right ATM

Not all ATMs are created equal, and the one you choose can directly impact the fees you pay and the exchange rate you receive.

Bank-Operated ATMs

Your best and most reliable option is to use an ATM that is directly attached to a physical bank branch. These machines typically offer the most favorable exchange rates set by the card network (like Visa or Mastercard) and do not add exorbitant operator fees. Look for ATMs from major Portuguese banks, including:

• Santander
• Millennium BCP
• Novo Banco
• Caixa Geral de Depósitos

Independent ATMs to Use with Caution

You will likely encounter privately-owned ATMs in high-traffic tourist areas, convenience stores, and airports. The most prominent brand is Euronet, easily recognizable by its bright blue and yellow branding. While convenient, these ATMs are best avoided. They are notorious for charging high service fees and pushing users towards Dynamic Currency Conversion (DCC), which results in a poor exchange rate.

Understanding ATM Fees and Charges

Withdrawing cash abroad involves a few potential costs. Knowing what they are can save you a significant amount of money.

Dynamic Currency Conversion (DCC)

Dynamic Currency Conversion, or DCC, is a frequent trap at both ATMs and card payment terminals. The machine will present you with an appealing offer to complete the transaction in your home currency (e.g., USD, GBP) instead of Euros. While it may seem helpful to see the cost in a familiar currency, this service comes at a high price in the form of a poor exchange rate set by the machine’s operator, not your bank.

Always decline this offer. When the ATM asks if you want to be charged in your home currency or the local currency (EUR), you must always choose the local currency, EUR. Your own bank will perform the currency conversion at a much more competitive rate, saving you money on every withdrawal.

Bank Fees

There are two other types of fees to be aware of. First, your home bank may charge its own fees, such as a foreign transaction fee (often a percentage of the withdrawal amount) or a flat out-of-network ATM fee. It is a good idea to check your bank’s policy before you travel.

Second, there is the local ATM operator fee. Official bank ATMs in Madeira (like those from Santander or BCP) typically do not charge a fee for withdrawals made with foreign cards. The high fees are almost exclusively charged by independent operators like Euronet.

Exchanging Money: Best Practices

While using ATMs is often the most straightforward way to get Euros, you might find yourself needing to exchange your home currency for cash. Navigating this process wisely can save you a significant amount in fees and poor rates, leaving you with more to spend on enjoying the island.

Should You Exchange Money Before You Arrive?

For most travelers, the best strategy is to wait until you arrive in Madeira and withdraw Euros directly from a reputable bank ATM. This method almost always provides a more favorable exchange rate than you would get from an exchange service in your home country.

However, for peace of mind, it can be a good idea to exchange a small amount of cash—perhaps €50 to €100—before you leave home. This ensures you have money for immediate expenses upon landing, such as a taxi from the airport or a coffee, without the stress of having to find an ATM right away.

Best Places to Exchange Currency in Madeira

If you do need to exchange physical cash on the island, a couple of options are better than others. Always check the offered exchange rate against the current mid-market rate online to understand how much of a margin is being taken.

• Banks: Major banks in Funchal and other towns will exchange foreign currency. They generally offer fair, transparent rates. The main drawback is their limited opening hours, which are typically from morning until mid-afternoon on weekdays only, and they are closed on weekends and public holidays.
• Exchange Bureaus (Câmbios): You will find dedicated currency exchange offices, known as Câmbios, in the tourist-heavy areas of Funchal. Their rates can be competitive, but they vary from one bureau to another. It is wise to compare the rates at a few different locations before committing to an exchange.

Places to Avoid for Currency Exchange

Convenience often comes at a high cost when exchanging money. Certain places are known for offering poor value and should be avoided unless you have no other choice.

• Airport Exchange Desks: The currency exchange counters at airports are notorious for having the worst exchange rates and highest commission fees. They capitalize on travelers’ immediate needs. Use them only as an absolute last resort, and exchange only the smallest amount necessary to get you to your hotel.
• Hotels: Your hotel reception may offer currency exchange as a service, and while it is undeniably convenient, the rates are typically unfavorable. You are paying a premium for the ease of not having to visit a bank or a dedicated bureau.

Paying for Things: Cash vs. Card

Navigating payments in Madeira is straightforward, but knowing when to use your card and when to have cash on hand will make your trip smoother. The island has a modern payment infrastructure, yet it retains a traditional side where cash is still preferred.

The Cash vs. Card Breakdown

While you can rely on your card for many expenses, you shouldn’t depend on it exclusively. Here’s a general guide to help you decide what to use and when:

• Credit/Debit Cards: These are your go-to for most significant transactions. They are widely accepted in hotels, car rental agencies, larger restaurants, and supermarkets, particularly in Funchal and other main tourist towns like Calheta and Santa Cruz.
• Cash (Euros): Cash is essential for the smaller, everyday moments that define a trip. You will need it for paying for local buses, buying fresh produce at the Mercado dos Lavradores, grabbing an espresso at a small village café, paying some taxi drivers, or purchasing crafts from a local market vendor.

Our recommendation is to adopt a hybrid approach. Use your credit or debit card for larger bills like accommodation and dinners at established restaurants. However, always carry a reasonable amount of cash for daily incidentals, small purchases, and exploring off-the-beaten-path locations where card machines are less common. For information on the best times to visit for pleasant weather, check out our guide to the best time to visit Madeira Island.

Using Credit and Debit Cards

Using your card in Madeira is generally safe and convenient. Keep these points in mind to avoid any surprises:

• Accepted Cards: Visa and Mastercard are universally accepted across the island. While you might find some places that take American Express (Amex), it is far less common. Discover cards are very rarely accepted.
• Contactless Payments: “Tap-to-pay” (contactless) is extremely common for transactions of all sizes, making small purchases quick and easy. Most terminals support this feature, including payments made via smartphones.
• Always Pay in Euros: This is a critical tip. When using your card, the payment terminal may present you with an option to pay in your home currency or in Euros (EUR). Always choose to pay in Euros. If you select your home currency, the machine uses a system called Dynamic Currency Conversion (DCC), which almost always involves a poor exchange rate and hidden fees. Let your own bank handle the conversion for a much fairer rate.

How Much Cash to Carry?

You don’t need to carry large wads of cash, but having some on hand is wise. A good starting point is to plan for around €40-€60 in cash per person for each day. This amount should comfortably cover small expenses without leaving you with too much excess currency at the end of your trip.

This daily cash budget is perfect for things like:

• A morning coffee and a pastel de nata
• Local bus fares
• Small souvenirs from a local market
• A glass of poncha at a traditional bar
• Entrance fees to smaller attractions or gardens

Tipping Etiquette in Madeira

Navigating tipping customs can be tricky, but in Madeira, the approach is refreshingly straightforward and relaxed. While tips are never obligatory, they are always a welcome acknowledgement of excellent service. Here’s a guide to help you show your appreciation appropriately.

Tipping in Restaurants and Cafes

In most restaurants and cafes, a service charge (serviço) is already included in the final bill. Because of this, locals do not always tip. However, for attentive and friendly service, leaving a little extra is a common and appreciated gesture.

There are two typical ways to do this:

• Rounding Up: The simplest method is to round up the bill to the nearest convenient figure. For example, if your bill is €28, you might leave €30.
• A Percentage: For a particularly good meal or exceptional service, leaving a tip of 5% to 10% of the bill is considered generous. You can leave the cash on the table or add it to the final amount if paying by card.

Tipping Tour Guides and Drivers

Your guides and drivers are often the key to a memorable experience, sharing their local knowledge and navigating the island’s winding roads. While not required, tipping is a wonderful way to say thank you.

• Tour Guides: For a half-day or full-day tour, a tip of €5 to €10 per person is a standard way to show your gratitude for an informative and enjoyable experience. If you’re looking for more things to do in Madeira, our guide covers top activities.
• Taxi Drivers: For standard taxi rides, simply rounding up the fare to the next euro is common practice. If a driver has provided extra service, such as helping with heavy luggage or taking you on a longer, pre-arranged island tour, a larger tip of a few euros is appropriate.

Tipping Hotel Staff

The staff at your hotel work behind the scenes to make your stay comfortable. A small gratuity is a thoughtful way to acknowledge their efforts.

• Housekeeping: It is customary to leave €1 to €2 per day for the cleaning staff. You can leave the total amount in an obvious place in your room, such as on the nightstand or a desk, at the end of your stay.
• Porters: For hotel porters who assist you with your luggage, a tip of €1 per bag is standard.

Final Money Tips for a Smooth Trip

A little preparation goes a long way in ensuring your financial interactions on the island are seamless. Keep these final points in mind before and during your visit to Madeira.

Inform Your Bank Before Traveling

This is a simple but crucial step. Before you depart, take a moment to notify your bank and credit card companies of your travel dates and destination. This quick alert helps their fraud detection systems recognize your international transactions as legitimate, preventing the inconvenience of a suddenly blocked card just when you need it most. Many banks now allow you to set a travel notice easily through their mobile app or online portal.

Have a Backup Plan

Relying on a single card or just cash is a risky travel strategy. Technology can fail, cards can be lost, and some places may only accept one or the other. A smart approach involves diversifying your payment options:

• Bring at least two different cards, ideally a debit card and a credit card from different banking networks (e.g., one Visa, one Mastercard).
• Keep these cards in separate places. You might keep one in your wallet and a backup in your hotel safe.
• Carry a small stash of emergency cash (perhaps €100) separate from your main wallet, just in case you lose access to your primary funds.

Understanding Local Prices

The pricing culture in Madeira is straightforward and similar to most of Western Europe. In shops, restaurants, cafes, and supermarkets, prices are fixed and non-negotiable. The price you see on the tag or menu is the price you pay.

Haggling or bargaining is not a common practice and is generally not expected. The one potential exception might be at certain craft stalls or flea markets, where a vendor might be open to a small, polite negotiation if you are buying multiple items. However, approach this with discretion; aggressive bargaining is not part of the local culture. For unique souvenirs, check out our guide to shopping and souvenirs in Madeira.