Mexico's currency is the peso (MXN). In the Hotel Zone and most tourist areas, US dollars are widely accepted too — but that convenience usually comes at a worse exchange rate than paying in pesos.
Cash vs card
Cards are accepted at hotels, chain restaurants and most Hotel Zone businesses. Smaller downtown eateries, markets, colectivos and street vendors are often cash-only, so carry pesos in small denominations for day-to-day spending.
Where to get pesos
ATMs (cajeros) are the simplest source of decent rates — withdraw from bank-branded machines where possible rather than the standalone tourist-zone kiosks, which tend to charge steeper fees. Avoid exchanging cash at the airport or hotel front desk if you can help it; both typically offer the weakest rates on the strip.
Tipping culture
Tipping is customary and meaningfully supplements service-industry wages. As a rough guide: 10–15% at sit-down restaurants, small cash tips for housekeeping (per day, left in the room), a few dollars/pesos per bag for porters, and something for tour guides and drivers on excursions. All-inclusive resorts vary on their own tipping norms — ask at check-in if it's unclear.
The "pay in dollars or pesos?" trap
When a card machine asks whether to charge in your home currency or pesos (dynamic currency conversion), choose pesos — the "convenience" of seeing your home currency almost always comes with a worse built-in exchange rate.