State Media Recognizes Digital Payment System Failure in Cuba

On Monday, the state-run outlet Cubadebate released a report using its own data to highlight the breakdown of digital payment systems in Cuba.

A government-affiliated journalist documented 23 consecutive refusals to accept transfers at agromarkets and private businesses in Alamar, located in East Havana. This area, according to official statistics, boasts the highest volume of retail sales nationwide.

Over the course of two months, more than twenty establishments in zones 6, 7, and 8 of Alamar consistently rejected digital payments, stating simply: transfers not accepted.

What makes this report particularly noteworthy is not just its content, but its source: a media outlet controlled by the regime, and this comes a mere three weeks after Miguel Díaz-Canel emphasized the need for banks in Cuba to be "more agile, more digital, closer to the people" to prevent managing money from becoming an "obstacle course."

Common Excuses for Rejecting Electronic Payments

The article outlines a variety of excuses merchants use to refuse electronic payments. The most common is "the card is full," a technically incorrect statement, as magnetic cards don’t store money but instead identify bank accounts.

Other reasons include arbitrary limits of 1,000 pesos per customer, restricted hours ("only in the morning," "until 12 PM"), and power outages, an excuse that persists even when electricity is available, according to Cubadebate.

However, the most telling excuse is: "my supplier does not accept transfers."

Structural Challenges in the Payment System

A small business owner with three months of operation in Old Havana explains the vicious cycle: "Wholesale suppliers have warehouses filled with containers. They don’t accept transfers because they purchase in dollars. How can they pay another country via transfer in CUP? They can’t."

This structural issue affects retailers: without the ability to convert their digital balances into cash at a commercial scale, operating through transfers becomes unfeasible.

Furthermore, many QR codes displayed in businesses are linked to personal accounts rather than fiscal ones: "Nobody uses the ONAT account. Everyone uses their personal account. This is tax evasion, but no one controls it."

Contradictory Promises and Economic Realities

Cubadebate itself concludes that "the street has already built its own parallel financial system," a stark contrast to the regime's promises.

Alberto Quiñones Betancourt, Vice President of the Central Bank of Cuba, stated in June 2024 that "no business can claim the right not to accept the payment method the customer chooses."

Yet, two years later, the push for bank transactions faces an environment where less than 10% of private businesses in provinces like Sancti Spíritus regularly accept transfers, and only 3.77% of transactions in Cuba are digital by 2026, three years after the regime mandated compulsory banking.

Impact of International Sanctions and Cash Shortages

The situation worsened on June 6 when Visa and Mastercard ceased operations in Cuba following U.S. sanctions against GAESA and its financial arm FINCIMEX, triggered by an Executive Order signed by Trump on May 1. This action removed the last available international card payment channel on the island.

This means that if someone needs to purchase a product in dollars in Cuba, they will likely need to pay in cash and buy that currency on the informal market, using Cuban pesos in physical form, not via transfer.

Meanwhile, the cash shortage threatens salary and pension payments in several provinces. Granma reported in June it lacked physical funds to pay pensions to 111,000 retirees.

Moreover, nearly 1.7 million pensioners across Cuba receive less than ten dollars a month, queuing from five in the morning to collect their payments, aware it buys very little.

Many of these elderly individuals are not proficient with the technology required for making transfers. They visit banks to withdraw cash but frequently are not attended to at the branches. They endure long lines, humiliation, and hours of waiting in the intense heat. Even though they have funds in their bank accounts, they cannot access them.