Cuba Has a New Unified Payment System

Cuba Has a New Unified Payment System
May 9, 2014
By Café Fuerte

"What currency do I pay in?" A growing dilemma in anticipation of Cuba's
imminent monetary unification.
HAVANA TIMES — The option of purchasing products at hard currency stores
in regular Cuban pesos (CUP) will be made available in commercial
centers around Cuba this month as part of the government's plan to
re-establish a single-currency monetary system on the island.

The possibility of paying with CUP or combining these with Cuban
Convertible Pesos (CUC) in cash or through debit cards will be offered
by Cuba's 28 largest shopping centers and by smaller establishments at a
later date, with a view to having at least one major establishment
employing this new system in each province by the end of May, Cuban
commercial authorities told the press.

Since early March, the hard currency stores La Copa (operated by Cuba's
TRD corporation) and La Puntilla (part of the CIMEX branch) have begun
to accept payments in CUP on an experimental basis, converting these
payments into their equivalent in CUC by applying the official exchange
rate of 1 CUC – 25 CUP.

CIMEX Commercial Vice-President Barbara Soto Sanchez and commercial
expert Arturo Kautzmann Torres told Cuba's Juventud Rebelde newspaper
that the measure will be applied gradually across the country, and that
its implementation will be regulated by the Implementation Commission
tasked with supervising the economic reforms now underway.

Avoiding Traumas

"The process is making headway without any traumas and our work schedule
allows us to implement the new system gradually, first in the food
section and then in the entire stores, so as to allow customers to
become familiarized with it," Kautzmann said.

Officials added that product inventories kept by Cuban corporations
continue to be entered into the books in CUC and that their bank
accounts are in that currency. This requires a differential deposit of
CUP incomes and new security measures to avoid any kind of financial crime.

In October of last year, the Cuban government announced it would set in
motion a process to establish a single-currency monetary and exchange
system in the country, one of the decisive steps taken as part of the
reform process impelled by Raul Castro. No date has yet been set for
so-called "Day Zero", which will mark the disappearance of the CUC, but
everything seems to indicate the measure will come into effect mid-year.

The report specified that registers at commercial establishments have
already been programmed to calculate CUP – CUC equivalences on the basis
of the official exchange, registering and detailing this transaction in
the customer's receipt.

A Temporary Solution

Kautzmann explained that keeping the CUC as the exchange referent is
merely a "technical and practical solution."

"This yet another payment facility, as the use of debit cards is. We
shouldn't however forget that it is a temporary measure. It makes no
sense to spend money on larger or more sophisticated registers when we
know we will be operating with a single currency soon, that the country
is moving towards monetary unification," the expert said.

As a security measure applied as part of this new measure, stores are
periodically extracting the cash in their registers, so that employees
do not have to handle large volumes of bills.

As for cards, all existing Cuban debit, wage, retirement or
international mission cards, as well as some cards issued by foreign
banks that do not face restrictions arising from the US embargo, will be
accepted at stores.

Shortage of CUP

One of the difficulties faced in extending debit card payment mechanisms
is the unavailability of debit modules at sales points, owing to their
cost and the unstable telephone service that hinders communications.

Store employees will inform the customer of the product's price in CUC.
The customer will then decide whether they wish to pay in CUP, CUC or a
combination of the two.

According to the figures quoted, in March La Puntilla took in 50,000
CUC. In the first week of April, it reported income of 25,000 CUP.
Experts anticipate the CUP figures to quadruple as this new payment
option becomes more popular.

Some independent reports are commenting on a growing shortage of CUP,
brought about by the unchecked sale of CUC by the population.

Following the announcement of the monetary unification, Cuba's money
exchange system began to face a number of difficulties and several
exchange locales have been forced to temporarily suspend their
operations because of a lack of CUP.

Source: "Cuba Has a New Unified Payment System - Havana Times.org" -
http://www.havanatimes.org/?p=103531