RevoluPAY money app resumes remittances to Cuba from US
More than a year and a half after the closure of official channels for transferring funds to Cuba, a new digital payment system allows Cuban Americans to send money to their families in Cuba without the intervention of financial entities managed by the Cuban army.
Canadian group RevoluGROUP, with a subsidiary in Miami, said last week that it had added Cuba to its list of more than 100 countries where its RevoluPAY mobile payment app can be used to receive funds. The company said the money transfer service is in full compliance with embargo regulations and has followed advice obtained from the Treasury Department.
Developing the app and getting all the banking licenses took years, but the result is a system that “the Cuban military can’t touch,” said Emilio Morales, vice president of the branch. Miami RevoluGROUP USA Inc., at the Miami Herald. in an interview.
Hundreds of money transfers to Cubans from the United States and other countries have already taken place successfully, he said at a press conference in Miami on Tuesday.
Official money transfer channels came to an abrupt end at the end of October 2020, when Western Union was forced to close its offices in Cuba due to new US sanctions against the military conglomerate GAESA and its subsidiary Fincimex, which handled money transfers to Cuba. The Cuban government, in turn, refused to allow a non-military bank to take over the business.
Thousands of Cuban Americans then found themselves with little recourse to help their families on the island. Many pay hefty fees through Miami-based agencies that use individual travellers, called “mulas,” to transport the money to the island.. This informal channel has been greatly reduced due to the closure of airports during the pandemic.
Morales, who has been tracking remittances to Cuba for several years as president of the Havana Consulting Group, estimates that Cuba received around $3 billion in remittances in 2019. Most of that money was captured by a network of military banks, giving devalued Cuban pesos. instead of dollars to the recipient. RevoluPAY puts an end to that, he said, and also offers Cubans “financial freedom” as the app provides access to a prepaid debit card issued by a foreign bank.
The military’s tight grip on the banking system is a major obstacle to resuming remittances to Cuba after President Joe Biden instructed his administration to explore ways to minimize the flow of money to the forces Cuban armies.
A task force on remittances sent its recommendations to the White House in August. Last month, a State Department spokesperson said the administration was exploring “innovative solutions, and that also includes digital payments.”
The State Department did not respond to a request for comment.
Although RevoluGROUP has not received special authorization to operate with remittances to Cuba, known as a specific license, Morales said he received guidance from the US Treasury Department in December detailing requirements for such services. under the exceptions of the embargo regulations. These exceptions are called general licenses.
The Treasury Department typically ignores or delays responding to inquiries about transactions that the administration does not support. But the written response to RevoluGROUP came relatively quickly, in just one month, according to a company statement.
How does the system work?
Cuban Americans who want to send money home have two choices: they can use RevoluSEND, an online payment system or the RevoluPAY application. With RevoluSEND, you can send money to the recipient’s account in MLC, a Cuban digital currency, at one of three Cuban banks: Banco Popular de Ahorro, Banco de Credito y Comercio and Banco Metropolitano SA. These banks are not under US sanctions.
MLC accounts are connected to Cuban-issued bank cards that can be used exclusively in government stores selling food and other basic necessities. According to the RevoluSEND site, customers wishing to send $100 to a relative or friend in Cuba will have to pay around $7 to deposit 90 euros.
This service could be useful for the most vulnerable Cubans, such as the elderly who do not have a mobile phone or who are not familiar with this type of financial technology, known as fintech.
“Fintech technology has filled a gap and provided services that are currently available online to a mass of millions of people who were disadvantaged because they did not have a bank account,” Morales said in the interview.
The RevoluPAY app offers more choice as the sender can transfer money either to an MLC account or directly to the recipient in what are known as wallet-to-wallet payments. The latter comes with no associated fees, Morales said.
The wallet is also linked to a Visa or Mastercard prepaid bank card offered by the application and issued by a European bank. Morales declined to say which bank would issue the cards, but said the company was working to find ways to send the physical bank cards to its customers in Cuba.
While cards from US banks generally do not work in Cuba due to embargo regulations, cards issued in Europe and elsewhere can be used in government stores, restaurants and other businesses.
Cuban card users would not be able to withdraw cash because the government froze the sale of foreign currency. But they could abroad.
The new service would allow Cubans, largely disconnected from the international financial system, to have a foreign bank card, which Morales said was “a real revolution”.
Customers can do “whatever they want with this money and this card”, he said. “This money is not going to a GAESA or a Cuban bank in a third country. The only way the Cuban government gets the money is when the user uses their card in a store.
Having a card issued by an international bank opens up many possibilities for Cubans, from paying for a Netflix subscription to booking a hotel abroad or buying a plane ticket, he said. he said at a Tuesday press conference in Miami.
The payment system complies with U.S. and international banking regulations, he explained, and users must upload their credentials to the system so the company can meet anti-money laundering requirements. and others.
Will the Cuban government allow it?
The Cuban government has already pushed back against RevoluPAY, saying it will charge higher fees than Western Union. Morales said Western Union charges more than RevoluPAY, about $12 to send $100.
Cuba’s central bank also said it has no formal contract or agreement with RevoluGROUP and cannot guarantee the security of transactions.
“The United States government maintains the prohibitions and enforcement measures applied in 2020 and 2021 against Cuban financial entities,” the bank said.
Morales confirmed that the company had no contracts with Cuban banks.
“There are no contractual links; we are not interested,” he said, adding that the transfer can take place despite “correspondent banking relationships,” a system that allows banks to provide financial services to institutions in other countries.
If the Cuban government decides to block bank transfers or debit card transactions, he said, it risks being penalized by Visa, Mastercard and Swift, the communication system used by most banks in the world. world.
“It will work,” he told the Herald, and “there’s nothing they can do about it.”
This story was originally published March 8, 2022 2:52 p.m.