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A Carnival cruise ship docked in Havana earlier this month, the first U.S. cruise in decades. Airlines are expected to begin direct Miami-Havana flights this fall. And since the U.S. and Cuban governments began the process of normalizing relations in December of 2014, U.S. visitors to the island nation have more than doubled.
However, a significant logistical knot still exists, and now is the time to untangle it. Once U.S. travelers walk onto the tarmac at Jose Marti International Airport or disembark from a ship in Havana’s harbor—if they don’t have a Stonegate Bank issued Debit MasterCard—they will have to pay for meals, hotel bills, and art with cash.
Despite U.S. regulations now authorizing the use of debit and credit cards in Cuba, very few U.S. citizens are able to do so in practice. The same goes for the extension of credit, with U.S. companies needing to find alternative financing methods despite a further change in U.S. regulations that allows for such an issuance by U.S. banks. In part, this is due to the uncertainty surrounding the future of the U.S. sanctions and lingering concerns about compliance risks associated with financial transactions and payment processing related to Cuba present obstacles.
But it’s important to note that changes to U.S. regulations since December 2014 have created important new opportunities for U.S. financial services sector engagement on the island. Specific activities now permitted include the provision of credit for most exports, processing of so-called U-turn transactions, and facilitation of payments.
Without the ability to process non-cash payments, travelers are spending less than they otherwise would. Without access to credit, companies are missing out on business opportunities. And ultimately, it is the Cuban people who lose out when the benefits of the renewed relationship between the U.S. and Cuba aren't maximized.
The U.S.-Cuba Business Council (USCBC) believes that the next phase in the bilateral relationship requires greater connectivity, especially in the financial services space. In recent meetings with the nascent Cuban private sector, it has been made clear that Cubans are eager for greater involvement by the U.S. financial services community. For the entrepreneurs and other businesses in Cuba, the ability to work with U.S. financial institutions and access state of the art technologies would mean significant progress towards their own ability to earn a better living.
"We've been encouraged by the meetings we've had with Cuban officials. We see tremendous potential for an expanded U.S.-Cuba relationship through the facilitation of greater commerce,” said Joseph Plumeri, Vice Chairman of the Board of Directors of First Data, the largest merchant acquirer, issuer processor, and independent network services provider in the world.
Ultimately, enhanced engagement of the U.S. financial services sector on the island and with the nascent Cuban private sector will empower both the Cuban people and U.S businesses.