Stonegate Bank Credit Card Leading the Way in Cuba

stonegate-bank-credit-cardThe Stonegate credit card - Stonegate of Pompano Beach Florida is leading the way for U.S. banks in Cuba. Image courtesy of Stonegate Bank.

On June 14, 2016, AP news agency reported that Stonegate Bank of Pompano Beach in Florida would issue the first US credit card intended for use in Cuba. This is wonderful news for the innovative, trailblazing Stonegate Bank, and also for Cuba and American tourists in general. It’s a step forward, it’s progress and most people will be ecstatic to hear the news.

That’s the good news story but, and there’s always a “but” to the big story. Like MasterCard – which has ventured into Cuba – the Florida bank credit card is not yet active because financial and legal adjustments between Cuba and the United States are still in process.  An official from the Central Bank of Cuba (BCC) made statements to this effect on the CubaDebate website.

The US embassy government website is still advising U.S. travelers to Cuba that credit and ATM cards issued by American banks are not accepted in Cuba just yet. Visitors to the island are instructed to bring enough money to last them until the end of their trip.  Currently most tourists bring cash when traveling.  Owners of non-U.S. bank accounts and credit cards can both withdraw cash from bank machines and pay for items, but credit card payments will only function at larger business institutions such as the major hotels.

The US trade embargo has banned virtually all financial dealings between Americans and Cubans. Cuba will eliminate the 10% surcharge on US dollar transactions once it is permitted to pay for items in dollars.

Although the Obama administration removed many restrictions on Cuban government transactions, transferred funds are still frozen in the United States making it problematic for Cuba and the trade business entities that deal with the Island.  American banks as well as many foreign banks fear dealing with Cuba because of the US embargo against the country.  In this respect, we can view Stonegate Bank as both a cutting-edge and a “trailblazing” bank.

David Seleski, CEO and President of Stonegate Bank said of the announcement in a press release, “This is the first step in relieving the burden of U.S. travelers carrying cash when travelling to Cuba and another step in normalizing commercial relations between the two countries. Hopefully more issuing banks will help this process by approving credit and debit cards as well.”

In March 2015, MasterCard started to permit cards that are issued in America to be used in Cuba. The Central Bank of Cuba along with other financial institutions has been working with Mastercard and its implementation.  U.S. federal laws have given individual banks the final say as to whether their customers can use their credit cards in Cuba.  Technical and security testing are ongoing with Cuba for the Mastercard and Stonegate credit card.

Approximately 100 American businesses and people have opened accounts at Stonegate Bank to receive a debit card cleared for use in Cuba. Almost fifty percent of these accounts belong to tour operators of  educational or cultural institutions which arrange visits to Cuba under the U.S. government approved categories each year. Cuban authorities have exempted the Stonegate bank cards from the usual ten percent levy on dollar transactions. This means that the cards will eventually be the most cost effective method for travelers to spend on credit while traveling and legally bring dollars into the Island.

The Central Bank of Cuba says that “it continues to work with MasterCard and other bodies involved in this operation, to provide the service of ATM network service to Stonegate Bank cards and other US banks to allow customer use in Cuba in the shortest time possible and thus help to provide better service to visitors.”

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