Havana. The Cuban Central Bank has announced new measures to encourage the use of electronic payment channels “between all economic and civil actors”. This is intended to reorganize financial relations in the Cuban economy two and a half years after the start of the currency reform. “We are accelerating a process that meets international standards, electronic payments are part of everyday life for citizens in every country,” said Alberto Quiñones Betancourt, Vice President of the Banco Central de Cuba (BCC).
In the future, companies will have to process their payments “using credit instruments and other applicable means of payment other than cash, using electronic means and channels wherever possible,” according to the central bank’s announcement. In addition, conditions are to be created for the gradual use of payment apps such as “EnZona” and “Transfermóvil”, which already have over four million users in Cuba, in all stores. This also includes the private sector for the first time. In order to set incentives for the changeover, a discount of at least two percent is granted for app payments, which is reimbursed by the banks.
In the future, ATMs are to be used primarily by the population to withdraw salaries and pensions, and no longer to provide larger sums for commercial transactions. However, private companies and the self-employed can still withdraw cash from bank branches.
Despite improvements in electronic payments, cash transactions in Cuba have increased in recent years “due to inflation and other factors,” the BCC said. At the same time, the ATM network is suffering from a lack of spare parts, which is why “the population’s growing demand for cash cannot be satisfied”. In the past few weeks, there have been increasing reports from various communities whose ATMs could hardly be stocked, and large bills in particular were becoming increasingly scarce.
The “bankarization” of payment flows had been considered for a long time with a view to combating corruption, money laundering and tax evasion, but was thwarted in the course of the emergence of a new exchange rate duality with the currency reform in 2021: Most private companies are dependent on black market exchange due to the banks’ lack of foreign exchange to make your purchases in foreign currency. In fact, the exchange rate of 120:1 introduced in August 2022 cannot be used either.
As a first step, it was announced on Tuesday that the approximately 1,000 gas stations nationwide would stop accepting cash by October 31. Also starting this month is a pilot program in which electricity supplier UNE is going fully cashless in several neighborhoods in Havana. This should improve the availability of cash for private individuals again, stabilize the informal exchange rate of the peso by skimming off the money in circulation and create more fiscal transparency in payment flows.
The measures are part of a “macroeconomic stabilization program” announced by Economy Minister Alejandro Gil at the last session of the Cuban National Assembly at the end of July. They are to be implemented “gradually” by February 2024. From this point on, salaries and larger business transactions may only be processed via banks.