According to a report in the Miami Herald, Stonegate Bank has announced plans to offer its customers the use of a debit card while traveling in Cuba.
There will about 10,000 outlets in Cuba including hotels and restaurants capable of processing transactions with Stonegate’s debit card. Only Stonegate’s debit card (a Mastercard) will function in Cuba.
While it has been technically possible to process credit cards in Cuba, U.S. rules have stymied banks in the U.S. from offering transaction processing because of the complexity of U.S. rules for Americans traveling to Cuba. Banks fear being liable for transactions made by Americans who may be traveling to Cuba in violation of U.S. rules that specify twelve authorized categories of travel. Vacation is not an authorized category of travel for U.S. citizens.
Stonegate’s decision to offer debits cards means it is comfortable relying on the travelers’ own self-selection of an approved category of travel. Mastercard will be processing transactions for Stonegate’s debit card.
Recently, Stonegate Bank won media attention for being the first U.S. bank since the 1960 embargo to conclude a correspondent relationship with Cuba’s Banco Internacional de Comercio S.A. (BISCA). Stonegate also took over domestic banking functions for the Cuban embassy after M&T Bank decided to exit the relationship. It is the correspondent relationship that will allow Stonegate Bank to settle debit card transactions with Cuban entities.
Here is a summary of Stonegate Bank’s debit card program:
- Users (business or personal) are required to open an account at Stonegate Bank with a minimum balance of $2,500;
- Mastercard will process transactions ONLY for Stonegate’s debit card – other Mastercard debit cards from another bank will not function in Cuba;
- ATMs in Cuba are not eligible at the moment.
