The official unit of currency is the Iranian rial, it is forbidden to import and/or export Iranian rials. Iranians almost always talk in terms of tomans, a unit equal to 10 rials. The sooner visitors get their heads around the idea of tomans, the better. Thus something priced as 100 rials is generally spoken of as costing 10 tomans, so do clarify before agreeing to purchase. Having a calculator to hand is useful so price negotiations between you and the vendor can quickly and easily be communicated. For small purchases such as fruit, nuts and so on a basic recognition of Farsi numeral symbols is useful.
Iran is a purely cash economy for the visitor. No credit cards. No traveller's cheques. Short-stay visitors will find it much easier to take quantities of US dollars in cash, preferably in high-denomination euros or US dollars printed since 1996. Apart from some hotels, carpet shops and travel agencies where you can pay in dollars or euros, all transactions are in rials. Whichever currency you choose, the most important thing to remember is to bring as much cash as you are likely to need, then a bit more.
Credit cards such as Mastercard (excluding American Express and Visa because of the US embargo) can be used for major purchases such as carpets, but billing may be processed through Dubai, Switzerland or Germany.
No currency declaration form is required from foreign visitors (but official rules and regulations change constantly), but independent and business travellers need to show a bank currency exchange receipt for payment of all hotel charges, flight ticket payments etc which are calculated in US dollars.
There are notes for IR100 (rare), IR200 (rare), IR500, IR1000, IR2000, IR5000, IR10.000, IR20.000, IR50.000 and IR100.000. Money, both rials and foreign currencies can be rejected if it has a tiny tear or is too grubby.
Although Iran has a functioning network of ATMs, they can only be used with locally issued bank cards, so are useless to travellers unless you open a local account.
Changing money on the street is illegal and as long as exchange shops are allowed to trade money at market rates it makes little sense to do this. You should demand at least the same rate as you would get in the exchange shop and expect the changer to take a 'service fee'. Count the rials carefully (there are often notes missing or folded over), and don't hand over your bills until you're sure the count is correct.
The easiest way to change money is at an official money-exchange office, where the whole deal is done in seconds, unlike in most banks where it can take considerably longer. Branches of the major banks can be found at Tehran airport and in most of the big hotels. Banks have been limited to changing money at a fixed rate, called the First Market, which is far lower than the floating market rate to be had at exchange shops. Only a few banks will actually change your money and then usually only US dollars, euros, Japanese yen or, less often, British pounds in cash (and only after the day's rates arrive from Tehran between 9am and 10am). You need your passport; bank staff will help with the Farsi paperwork.
Exchange shops are reliable and can be found in most cities, usually signed in English and with rate boards in the window. The process is completely paperwork free.
If you want lo change your Rial back when you leave the country, make sure you have kept the bank exchange certificates and your customs declaration form. Banks are usually open from 9am to 4pm or 4.30pm from Saturday to Wednesday, and are closed on Thursday afternoons and Friday.
Do not change too much money when you first arrive; US$50 go a long way, particularly if you are travelling with a group. If you are travelling alone, remember that most hotels will ask to be paid cash in dollars. Food and transport within the country are very cheap, and hotels will probably be your biggest expense.
Sanctions have made it practically impossible to transfer money into or out of Iran without the assistance of a worldwide network of shady money dealers.
Economic sanctions mean most Iranian businesses need to use unorthodox methods to get paid from abroad. For travellers, if you book a tour you might find yourself paying to a Turkish or Russian bank account, or being asked to pay in cash when you arrive.
Tipping is not a big deal in Iran. In upmarket restaurants (mainly in Tehran) a 10% gratuity might be expected -on top of the 10% service charge that's often built into the bill. But in most other places any money you leave will be a pleasant surprise. It's normal to offer a small tip to anyone who guides you or opens a building that is normally closed. If your offer is initially refused, persist.
As a general rule the prices of groceries, food, sights, transport (except private taxis) and most things with a price tag attached are fixed. But virtually all prices in the bazaar are negotiable, particularly for souvenir-type products and always for carpets. In tourist areas, such as Imam Sq in Esfahan or the Bazar-e Vakil in Shiraz, bargaining is essential.
At the end of your first taxi trip in Iran, there's a good chance you will ask the driver 'chand toman' (how many tomans?) and he will reply 'ghabeli nadari'. His words mean 'it's nothing', but the taxi driver still expects to get paid. This is taarof, a system of formalised politeness that can seem confusing to outsiders, but is a mode of social interaction in which everyone knows their place.
Despite the apparent contradictions in the taxi, you'll soon learn that taarof is more about people being sensitive to the position of others than routine politeness. So for example, an offer of food will be repeatedly turned down before being accepted. This gives the person making the offer the chance to save face if in reality they cannot provide a meal (they will stop offering after the second or third time). A good rule is to always refuse any offer three times but, if they continue to insist, do accept. When a shopkeeper, restaurateur or (less often) a hotel manager refuses payment when asked for a bill, do remember that this is just taarof - don't leave without paying!