Stonegate Bank in Florida has introduced a credit card that its customers can use in Cuba.
In doing so, the $2.5 billion-asset bank, in Pompano Beach becomes first U.S. bank to make credit cards available for use in the Caribbean island nation. Currently, U.S. citizens traveling to Cuba must pay for goods and services in cash. Cuban merchants have already been allowed to accept payments from cards issued by Canadian and European banks.
Stonegate, which announced the rollout of the card Tuesday, is likely to face little competition in its Cuba initiatives from either large banks or community banks, said Joseph Fenech, an analyst at Hovde Group. Big banks are subject to Durbin-amendment-related restrictions on interchange fees, while smaller banks do not have the type of sophisticated regulatory processes in place to enter the Cuban market.
Customers can apply for the MasterCard credit card online.
Stonegate will also begin issuing corporate, purchasing, payroll and prepaid cards in the next month. The commercial cards will be targeted to Stonegate's U.S. customers that do business in Cuba, said Dave Seleski, its chief executive. Those firms that have employees there could use the payroll cards to pay them, he said.
Stonegate last year was granted approval by the U.S. State Department to provide a banking account to the Cuban Embassy in Washington, after President Obama announced the formal restoration of diplomatic relations. In November Stonegate began issuing MasterCard debit cards for use at point-of-sale terminals in Cuba.
To promote the new credit card, Stonegate will issue 1,000 credit cards featuring art created by the Cuban artist Michel Mirabel, displaying the U.S. and Cuban flags.