Currency in Panama: Paying, ATM; Exchanging money, etc…

Understanding Panama’s Currency

The Dual Currency System: USD and Balboa (PAB)

Panama has a unique dual-currency system. While its official currency is the Panamanian Balboa (PAB), the country uses the US Dollar (USD) for all paper money transactions. The Balboa is permanently pegged to the US Dollar at a 1:1 ratio, meaning one Balboa is always equal to one US dollar.

You will only encounter the Balboa in coin form, which circulates alongside US coins. These include denominations of 1, 5, 10, 25, and 50 cents, as well as a popular $1 coin. Prices in shops and restaurants may be listed with a “B/.” or a “$” sign, but the value is identical.

For our travelers from the United States, this system is exceptionally convenient. You do not need to exchange your US dollars for a different paper currency before or during your trip.

How to Pay: Cash vs. Card

Using Cash (US Dollars)

• Small Bills are Key: We highly recommend carrying a good supply of small denomination US bills, such as $1, $5, $10, and $20 notes. These are essential for daily purchases, taxis, and small vendors.
• Large Bills ($50, $100): Larger bills can be very difficult to use, especially at smaller shops, local restaurants, and in rural areas. Many businesses are reluctant to accept them due to concerns about counterfeit currency and a lack of sufficient change.
• Receiving Change: When you pay in US dollars, expect to receive your change as a mixture of US currency and Panamanian Balboa coins. We encourage you to use these coins for small purchases like snacks, drinks, or local bus fares.

Using Credit & Debit Cards

• Where They Work: Credit and debit cards are widely accepted in Panama City and other major tourist centers, particularly at mid-to-high-end hotels, established restaurants, and large supermarkets.
• Where They Don’t: Cash remains essential for transactions in rural areas, smaller towns, local markets, and on island archipelagos like the San Blas.
• Accepted Cards: Visa and Mastercard are the most commonly accepted cards. American Express is accepted less frequently, so it is wise to have an alternative.

Important Pre-Travel Steps:

• Notify your bank and credit card companies of your travel dates and destinations. This is a crucial step to prevent your cards from being flagged for suspicious activity and blocked.
• Inquire about foreign transaction fees associated with your cards. If possible, consider traveling with a card that waives these fees to avoid unnecessary charges.

While cards are convenient in urban centers, we strongly advise you to always carry a sufficient backup cash fund for unexpected needs, smaller vendors, or excursions into more remote areas.

Accessing Cash: ATMs

Locating ATMs (Cajeros Automáticos)

ATMs, known locally as Cajeros Automáticos, are readily available in cities and larger towns. You can typically find them at banks, inside shopping malls, and at some large grocery stores.

Remote Area Warning: Please be aware that ATMs are scarce or entirely non-existent in remote regions, national parks, and on the islands. It is vital to plan ahead and withdraw sufficient cash before venturing into these areas.

Destinations such as the San Blas Islands or remote parts of the Darién region are entirely cash-based economies. It is imperative to withdraw all the cash you will need before visiting these areas.

Fees and Withdrawal Limits

• Double Fees: When using an ATM, anticipate being charged two separate fees: one by the local Panamanian bank (typically $5-$6 per transaction) and another by your own home bank for using an out-of-network machine.
• Withdrawal Limits: Most Panamanian ATMs impose a withdrawal limit of around $250 to $500 per transaction. Your home bank will also have its own daily withdrawal limit, which you should confirm before your trip.
• Dispensed Currency: ATMs in Panama exclusively dispense US Dollars.

ATM Safety

• Whenever possible, use ATMs located inside a bank or in a well-lit, public area like a shopping mall rather than one on the street.
• Always be conscious of your surroundings when withdrawing money. Shield the keypad with your hand when entering your PIN.
• We recommend avoiding the use of standalone ATMs on quiet streets, particularly after dark.

Exchanging Foreign Currency

For Travelers with US Dollars

No currency exchange is necessary. You may use your US dollars directly for all transactions throughout the country.

For Travelers with Other Currencies (EUR, CAD, GBP, etc.)

• Best Practice: It is generally more practical and cost-effective to withdraw US dollars from an ATM upon your arrival in Panama rather than bringing your home currency to exchange.
• Where to Exchange: If you must exchange cash, please do so at a reputable bank or a casa de cambio (exchange house) in Panama City to secure the most favorable rates.
• Airport Exchange: We advise against exchanging money at the airport. The rates and commission fees offered there are typically very poor.
• Difficulty Outside the City: Be aware that exchanging any currency other than US dollars is extremely difficult, if not impossible, once you leave Panama City.

Tipping Customs

General Guidelines

• Tipping is a customary way to show appreciation for good service in Panama, though it is not always obligatory.
• All tips should be given in cash, using US dollars.

Restaurants & Bars

• Standard Tip: For good service at a sit-down restaurant, a tip of 10% is the standard and is greatly appreciated.
• Check the Bill: Before tipping, always review your receipt. Some establishments, particularly in tourist-heavy areas, may automatically include a 10% service charge, often listed as servicio or propina.
• For bartenders, leaving $1 per drink or 10% of the total bill is a common practice for good service.

Tour Guides & Drivers

• Tour Guides: For a full-day tour, a tip of $10 to $20 per person is a thoughtful gesture for an informative and enjoyable experience.
• Private Drivers: We suggest $5 to $10 for a half-day of service, and $10 to $20 for a full day.
• Taxi Drivers: Tipping is not expected for standard taxi rides, but rounding up the fare to the nearest dollar is a common and appreciated gesture.

Hotel Staff

• Bellhops: A tip of $1 to $2 per bag is appropriate for their assistance.
• Housekeeping: We recommend leaving $2 to $5 per day for the housekeeping staff. It is best to leave the cash on the pillow or in a clearly marked envelope to ensure it is received.