Money in Iceland

Iceland is virtually cashless — cards work everywhere

Iceland is one of the most cashless societies on Earth. Visa and Mastercard (including contactless, Apple Pay, and Google Pay) are accepted at virtually every business — restaurants, petrol stations, hot-dog stands, remote highland huts, campsite showers, public toilets, and even unmanned farm stalls. Many visitors spend an entire trip without handling a single banknote. There is no practical need to carry cash in Iceland. If you do want a small cash reserve, withdraw ISK from an ATM on arrival — but expect to use your card for 99% of transactions.

The Icelandic Króna — a small, volatile currency

Iceland's currency is the Icelandic Króna (ISK), plural krónur. Banknotes come in 500, 1,000, 2,000, 5,000, and 10,000 ISK denominations; coins run from 1 to 100 ISK. The króna is a floating currency and can fluctuate significantly, so check the current rate rather than relying on a remembered one. Exchanging currency before arrival is unnecessary — just use your card. At card terminals and ATMs, always choose to pay in ISK and decline the “pay in your home currency” option (dynamic currency conversion), which lets the merchant's processor set the exchange rate instead of your own bank and costs you a noticeable margin every time.

ATMs available but rarely needed

ATMs are found at Keflavík airport, in Reykjavik, Akureyri, and in most towns. The major banks — Landsbankinn, Íslandsbanki, and Arion Bank — operate ATMs that accept Visa and Mastercard. Withdrawal fees vary by your home bank; Icelandic ATMs themselves rarely charge a separate fee. Given how universally cards are accepted, most visitors never need to withdraw cash at all. If you do, take out only a small amount — enough to cover the rare cash-only moment rather than a working budget, since you will struggle to spend it.

No tipping culture — prices include service

Iceland has no tipping culture. Service charges are built into prices at restaurants, hotels, and taxis. Leaving a tip is not expected and not customary — staff are paid fair wages. If you receive exceptional service, rounding up or leaving a small amount is appreciated but never anticipated. At bars, cafés, and tour operators, tipping is equally uncommon. This is one less expense to budget for, which is welcome given Iceland's high prices.