First U.S. debit card ready for use in Cuba

Photo: AFP/Getty Images)

Photo: AFP/Getty Images)

MIAMI — Americans visiting Cuba can finally put away their cash and pull out their debit card.

MasterCard and Fort Lauderdale-based Stonegate Bank announced Thursday that their cards are now active for use in hotels, restaurants and other stores in Cuba, becoming the first to take advantage of the new opening with the communist island.

In a statement, the two companies said there are 10,000 merchants in Cuba that can accept the cards. ATM transactions won’t be available until 2016, but Americans can now use their debit cards to pay for hotels rooms, meals and all kinds of products and services across the island.

A MasterCard executive even tested out the cards earlier this week to purchase one of Cuba’s iconic cigars.

“As the infrastructure continues to develop, this milestone reinforces a collective effort … to deliver our cardholders a convenient and safe way to pay when traveling to Cuba,” said Jeff Wilson, president of the GeoCentral division at MasterCard.

The announcement comes nearly a year after President Obama and Cuban President Raúl Castro announced that the Cold War foes would end their five decades of isolation and re-establish diplomatic relations. The U.S. departments of Commerce and Treasury started rolling out a series of regulatory changes to allow Americans to expand trade and travel to Cuba, and both countries reopened embassies in each country’s capital.

Despite that progress, many American companies and banks have balked at jumping into a relationship with the Cubans, citing the economic embargo the U.S. government maintains on the island and other barriers to a normal business relationship. Congress is unwilling to lift the embargo until the Cuban government expands political freedoms.

MasterCard and American Express said early on that their cards could be used in Cuba, but they needed to find a U.S.-based bank that was willing to process the transactions.

Then came Stonegate, a 10-year-old bank in Florida that was willing to take the risk. The bank already has agreed to process financial transactions for the Cuban Embassy in Washington, D.C., which had been stuck doing its work in cash because it couldn’t find a U.S. bank to do so. Now, the bank will assume responsibility for transactions by Americans on the island and work with Cuba’s banking system to ensure the payments move between the two countries.

“This is the first step in relieving the burden of U.S. travelers carrying cash when traveling to Cuba and another step toward normalizing relations between the two countries,” said Dave Seleski, president and CEO of Stonegate Bank.

This entry was posted in Exchanges. Bookmark the permalink.