Decades-old restrictions on financial transactions involving Cuba are falling rapidly. Ahead of the president’s historic visit this weekend, the U.S. Treasury department announced an easing of sanctions and restrictions, including a lightening of some Office of Foreign Asset Control (OFAC) restrictions. Today, Western Union announced it will launch full remittance services into Cuba as a direct result of the lifting of regulations. MasterCard allowed use of its cards in Cuba as of March 2015, and banks such as Stonegate Bank quickly stepped in to create the first correspondent bank relationship with Cuba to eliminate the need to clear transactions through a third-party country.
P2P payments, such as those being facilitated by Western Union, are likely to represent the majority of cross-border payment transactions in the short term. As the Cuba tourism industry rebounds, travel-related payments on the major card networks will follow, and business payments will begin to emerge as the foreign business presence increases. It will likely be some time before we see organic demand for non-travel related card-based consumer payments within Cuba due to the present state of their economy.
Welcome to the 21st century, Cuba!