Jake Miller
Italy has a sophisticated banking system, with global giant UniCredit taking a large slice of the market. The country's oldest bank, Banca Monte Dei Paschi di Siena, has been in continuous operation since the 15th century. While traveller's cheques are not commonly used in Italy, banks, railway stations, airports, and major hotels will exchange them, although often at a less convenient rate. It is recommended that travellers' cheques be taken in euros, pounds sterling, or US dollars to avoid additional exchange rate charges. Currency can also be exchanged at exchange booths and ATMs, although these may charge higher fees.
| Characteristics | Values |
|---|---|
| Currency exchange at banks | Traveller's cheques, cheques and foreign money can be exchanged at banks, but some banks may not offer this service. |
| Currency exchange at ATMs | ATMs are widely available in Italy and can be used to withdraw local currency. ATM commissions typically range from 0-3%, but can be higher. It is advisable to use a bank ATM and to decline the bank's conversion rate to get the interbank rate. |
| Dynamic Currency Conversion (DCC) | When using a credit or debit card, you may be asked if you want to be charged in your home currency. It is generally more economical to opt to be charged in the local currency to get a better exchange rate. |
| Traveller's cheques | Traveller's cheques are not commonly used in Italy and are not accepted as direct payment. Some banks may exchange traveller's cheques, but usually only if you have an account with them. American Express offices may be a better option for exchanging traveller's cheques. |
| Credit cards | Credit cards are accepted in many shops, hotels, and restaurants throughout Italy, although smaller businesses may only accept cash. Visa and MasterCard are the most widely accepted. It is recommended to ask merchants if they accept credit cards before purchasing. |
| Currency | The currency of Italy is the Euro. |
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What You'll Learn
Traveller's cheques
It is recommended that you use your debit or credit card for payment and withdraw cash from an ATM. All major credit and debit cards are accepted in Italy. Shops and restaurants will usually display signs on the door to indicate which cards they accept, but it is always good to check first. Smaller businesses may not accept card payments, so it is worth carrying some cash.
If you do decide to take traveller's cheques to Italy, it is worth noting that some people have reported difficulties in cashing them. It is recommended that you cash your traveller's cheques at American Express offices in the cities you visit. American Express charges a high commission to cash their cheques, and many banks and financial institutions will not accept them.
If you are set on using traveller's cheques, it is worth noting that Visa cheques and double signature cheques may cause confusion in Italy. It is recommended that you use BNL to cash your cheques, as they generally have the lowest rates, and you won't have to keep giving your information.
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Dynamic Currency Conversion
In Italy, some travellers have reported being asked if they want to be charged in their home currency when using ATMs, but this is not a common practice. Even if DCC is offered, it can always be avoided by opting to be charged in the local currency (Euros in Italy). It is important to read the screen carefully when using ATMs abroad, as the option to choose the local currency may appear later in the transaction.
To avoid unexpected fees, it is recommended to use a debit card for cash withdrawals and a credit card for purchases. Additionally, using a credit or debit card that has low or no currency exchange fees can help minimise costs. It is also a good idea to notify your bank before travelling to Italy, as anti-fraud measures may block your card if it is used outside of your home country.
When exchanging cash in Italy, it is best to avoid exchange booths and banks, as they often charge high commissions and offer unfavourable exchange rates. ATMs typically offer better exchange rates, but it is important to use an ATM from a reputable bank to avoid additional fees. Some travellers have reported success in exchanging currency at American Express offices in various cities.
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ATM withdrawals
Italy has a sophisticated banking system, with ATMs being easy to find. However, it's worth noting that smaller villages might not have banks or ATMs, so it's advisable to withdraw money in tourist areas.
ATMs in Italy typically have fees of up to €5, and your bank may also charge fees for using your card abroad. It's important to check with your bank before travelling to understand their charges.
When using an ATM in Italy, you will usually be asked if you want the transaction to be carried out in your home currency or the local currency. It is recommended to choose the local currency, as this will mean you get a better rate, with the conversion being done by your bank or card provider.
ATMs in Italy generally have withdrawal limits of between €250 to €1000 per transaction, although some may have no set limit. It's worth noting that your bank will likely have its own daily, weekly, and/or monthly withdrawal limits, so the specific limit may depend on your bank.
To avoid multiple smaller withdrawals, it's better to make larger withdrawals. However, do ensure your card can handle the equivalent amount in your home currency. Additionally, it is recommended to bring at least two cards from different banks as a backup in case one of them fails.
Some ATM networks are better than others, so it's advisable to use bigger-name banks with more network reach, such as Intesa SP or UniCredit. BNL (Banca Nazionale del Lavoro) is also a good option as it is part of the Global ATM Alliance, which waives international ATM fees.
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Credit cards
Italy has been a member of the Eurozone since its launch in 1999, and the Euro is the dominant currency. While it is possible to use other currencies in some places, the exchange rates applied are likely to be poor. It is also common for shops and restaurants to charge more if you pay in US Dollars.
If you use a credit card, you may be asked if you want to be charged in your home currency. This is called Dynamic Currency Conversion (DCC) or Dynamic Exchange Rate, and while it may seem more convenient, it often results in a higher charge. This is because the exchange rate is chosen by the retailer's bank and not your home bank. Therefore, it is generally better to opt to pay in the local currency to make sure you get the best deal.
Before travelling, it is a good idea to call your credit card company and let them know when and where you will be travelling. You should also ask about any foreign transaction fees, as some credit cards with travel benefits do not charge these fees, while many others will charge 3% or more. It is also worth checking if your credit card company offers any kind of travel insurance or protection.
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Foreign transaction fees
When travelling to Italy, it is important to be aware of foreign transaction fees, which can add up quickly. Foreign transaction fees are often applied when using a debit or credit card abroad, and can range from 1% to 3% of the purchase amount or ATM withdrawal. Some banks also charge a flat fee for foreign ATM withdrawals, which can be around $5 on average.
To avoid these fees, it is recommended to use a credit or debit card that has low or no foreign transaction fees. Some reputable no-fee cards include those from Capital One and Charles Schwab debit cards. Most credit unions and some airline loyalty cards also have low or no international transaction fees. Additionally, consider using a mobile banking app like Varo, which charges no foreign transaction fees or ATM fees at over 40,000 Allpoint® ATMs.
It is also worth noting that while Traveller's Cheques are accepted in Italy, they are not a common form of payment and may incur high fees and poor exchange rates. Carrying cash in Euros is still valuable, as smaller businesses and restaurants may only accept cash. However, be mindful that Italy has set a limit of 2000 EUR for cash payments, so larger purchases should be made electronically.
When using your card in Italy, be cautious of Dynamic Currency Conversion (DCC). This is when you are given the option to pay in your home currency, but the exchange rate applied is typically less favourable than the rate your bank would offer. Always opt to pay in the local currency (Euros) to ensure you get the best exchange rate.
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Frequently asked questions
Using an ATM to withdraw local currency is generally the most economical option. However, be aware that your home bank may apply fees to cash withdrawals abroad. It is worth checking if your home bank works in partnership with any Italian banks or has its own branches in Italy, as this could give you access to free cash withdrawals.
Banks in Italy may not exchange currency for you if you are not an account holder. However, currency can be exchanged at railway stations, airports, and major hotels, although the rates may not be as good as those from an ATM.
The currency in Italy is the Euro.
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