How to pay for things in Laos and other money tips
In Laos, cash is the dominant form of payment for everything
Credit cards are used at a limited number of places, like major hotels and high end restaurants/shops. As you can imagine, in our capital Vientiane you will find more businesses accepting credit cards. In Luang Prabang, you will also find many shops on the main street (Sisavangvong Road) that cater to tourists accepting cards. Many businesses will also charge an additional 2-3% fee for credit card usage
Our currency is Laotian Kip (LAK), and 1 USD = approximately 8700 LAK. Cash Kip is the easiest way to pay for things in Laos
Regarding paying with USD: payment by cash USD is accepted at many places in Laos. However, unlike in our neighbor Cambodia, where USD is one of their main currencies, in Laos USD is nowhere near as widely accepted. You pay for your tourist visa in USD and that's about it. Once you're inside Laos, everything will be priced in Kip. The though many businesses do accepted USD for payment, they will usually have a USD price that's 5-10% higher than their Kip price (meaning they charge a very unfavorable exchange rate). Additionally, only USD notes in very good conditions are accepted, and all change will be given to you in Kip
Paying wiht Thai Baht: In Vientiane and Luang Prabang, many businesses also accept Thai Baht for payment. Similar to paying with USD, their rates will not be very good. Again, any change will be given back to you in Kip
When you leave Laos, make sure to convert all your money to a foreign currency while you're still in Laos because it's very unlikely that you will be able to sell your Kip outside of Laos, or even if you can you will only be able to do so at a bad rate
There are 2 ways to get cash Kip:
1. Money exchange upon arrival in Laos:
This is the most reliable and cheapest way to get Kip
You most likely won't be able to get Kip outside of Laos. Our currency is not a major one and most countries simply won't have any Kip to exchange for you. However, you may be able to find some exchange shops in Thailand and Cambodia that can exchange Kip for you at very terrible rates
The best way to get Kip is to bring in a major foreign currency to Laos:
USD will always give you the best rate. There's also no significant difference in rates among various exchange shops. If you have USD, you can just go to any exchange shop and get Kip at a competitive rate
Other "hard" currencies like Euro, GBP, JPY and major regional currencies like Thai Baht, Chinese RMB and Singapore Dollar and Australian Dollar are also accepted by most exchange shops at decent rates
Minor currencies like Canadian Dollar, Vietnamese Dong, Hong Kong Dollar, are also accepted, but they won't be accepted by all exchange shops so you will have to do more shopping around to find one that gives you good rates
Exchange at airport or in city: from what I've seen, if you have USD, EUR, CNY, rates you get at airports are basically the same as in the city, so rest assured you're getting pretty much the best rate at the airport. For other currencies, the airport is about 1% worse than in the city
Tip: it's cheaper to exchange larger amounts. You will usually get a better rate if you exchange more than $50USD, and even better rate if you exchange more than $100USD
2. Withdrawing from ATMs
There are many ATMs in Vientiane, Luang Prabang, Vangvieng, Pakse and other cities. It's a very convenient way to get cash in Laos, but it will be more expensive than exchanging foreign currency
Pretty much any foreign bank cards are accepted by the ATMs, as they are connected to PLUS/Visa, Cirrus/Maestro/Mastercard, JCB, Union Pay networks, which account for the vast majority of world's bank cards. Point is, you can be rest assured that you can use your bank card to get cash in Laos
However, getting money from Lao ATMs is not cheap:
Most ATMs limit to either 1 or 2 million Kip per withdrawal ($115 or $230 USD per). Some ATMs belonging to ANZ Bank have 4 million Kip withdrawal limit
Each withdrawal will cost you 20,000-40,000 Kip ($2.3-$4.6 USD). This is effectively a ~2% additional fee.
There are effectively 3 costs to ATM withdrawal:
The 20,000-40,000 Kip withdrawal fee
Exchange rate
Your own bank will likely charge you a flat fee for making foreign ATM withdrawal unless you have no-foreign-fee banking package
All these costs which can easily add up to 4-8% of your withdrawal! So it's not hard to see why ATM usage is much more expensive than bringing foreign currency for exchange