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Table of Contents

Lead Story

Encryption - the secure payment adoption challenge

News

Industry Update

High court rebuffs merchant challenge to debit interchange

MasterCard leads way for U.S. card acceptance in Cuba

NRF show celebrates innovation, spots trends

Girl Scouts stage Digital Cookie 'bake-off'

Features

Hotel industry technology grab

Rebranding risks and rewards

Shopping sessions heat up on mobile

Views

Washington becomes a prepaid buzz kill

Patti Murphy
ProScribes Inc.

2015 Payments industry trends

Mark Flamme and Kevin Grieve
Strategy&

Education

Street SmartsSM:
Emails: Selling through rain, sleet or snow

Tom Waters and Ben Abel
Bank Associates Merchant Services

Merchant contract transparency should be the norm

Alex Nouri
EFT Direct

New tools for a new era

Jeff Fortney
Clearent LLC

You're the coach, what's your game plan?

Adam Moss
CardConnect

Company Profile

Humboldt Merchant Services

New Products

QuickBooks payments, lightning speed

Lightning for QuickBooks
TouchSuite

Web security services designed for SMBs

Web Security Services
ControlScan Inc.

Inspiration

Gaming work

Departments

Readers Speak

GS 10 Years Ago

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

February 09, 2015  •  Issue 15:02:01

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MasterCard leads way for U.S. card acceptance in Cuba

If you're planning a trip to Cuba, you may want to take along your MasterCard, because U.S.-issued American Express, Discover and Visa cards can't be used on the island nation. That's the situation for now, at least.

MasterCard Worldwide is the first card brand to lift a decades-old ban on using U.S.-issued credit and debit cards for transactions with Cuban sellers, effective March 1, 2015. The move, heralded on the company's website Jan. 23, follows word out of Washington, D.C., last month that the federal government was relaxing restrictions on Americans traveling to Cuba or doing business with Cuban firms and individuals.

American Express Co., Visa Inc. and Discover Financial Services have not followed suit, although according to published reports, similar moves are under consideration at both Visa and AmEx.

MasterCard said it decided to lift the ban based on "recent guidance" from the Office of Foreign Assets Control, an office within the U.S. Treasury Department agency that administers and enforces trade sanctions related to foreign policy. "MasterCard will work with its U.S. issuers to support their Cuba-related activities and decisions," the card company wrote. "Before travelling to Cuba cardholders should contact their bank to ensure the card will be supported on the island."

Lifting costly sanctions

Trade sanctions are implemented whenever foreign countries, regimes, terrorists, narcotics traffickers and others are deemed threats to national security, foreign policy or the U.S. economy. OFAC imposes hefty fines on U.S. companies and individuals found to be in violation of sanctions. In the first 11 months of 2014, OFAC assessed over $1.2 million in civil penalties to a Portland, Ore., company that violated U.S. sanctions on Cuba by purchasing goods, between 2007 and 2011, that used raw materials sourced in Cuba.

The Cuba sanctions date to 1961 and were a consequence of the Cold War. President Obama stated in December 2014 that the United States would relax many of those sanctions, thereby permitting Americans to travel to and do business in Cuba.

While the government has eased some restrictions on trade and travel, the White House noted that the long-standing trade embargo remains in place, pending additional negotiations between the two countries and congressional approval.

Recently, OFAC published details on the lifting of Cuban sanctions. Listed were specific activities that are now permissible for U.S. banks, companies and consumers. According to a U.S. Treasury fact sheet, the eased restrictions allow:

Going global

Leading acquirers recognize the value of expanding beyond domestic borders, especially as more U.S. merchants take their businesses to new markets. And although Cuba is not a large market, the island's proximity to the United States and pent-up demand following decades of restrictions on travel and trade suggest new opportunities for driving card payments.

Growth in e-commerce also is stoking interest in international sales and card payment acquiring. OC&C Strategy Consultants predicts international sales by U.S. online retailers will grow from $25 billion in 2013 to $130 billion in 2020. OC&C collaborated with Google Inc. to formulate its predictions, published last year in the report The Global Retail e-mpire.

"Over the next decade, online retail will become even more international," said Anita Balchandani, a partner at OC&C. "This represents a great opportunity for retailers." Balchandani said that online marketplaces like eBay, will contribute to the trend. "We expect online marketplaces to be part of the mix for retailers particularly in the early days of their international expansion, and to play a complementary role with a retailer's own website and stores."

"We believe it's time to declare the 'death of distance'," Alex Von Schirmeister, eBay Inc.'s point man on European expansion, said in a statement issued by OC&C, which operates from offices in Boston and Europe. "Cross-border trade on eBay in the second quarter of 2013 reached $11 billion, representing 22 percent of the company's total commerce and payments volumes," he revealed.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Impact Paysystems | Electronic Merchant Systems