Sending money from the United States to Cuba may seem complicated thanks to the many government restrictions that limit the transfer of money to the island. But thanks to the dollarization of the internal Cuban market and modern technology, there’s been a rise of alternative methods that make it easier for you to send money to Cuba!
Although options are still limited, there are different ways for you to offer economic support to your family members in Cuba. In this article, you’ll find all of the necessary information to choose a remittance method that offers ease, speed, and safety.
Who can I send money to in Cuba?
Up until this article’s date of publication, Cuban remittances from the United States are limited to close relatives. According to the US government’s Code of Federal Regulations, close family members include anyone who is within three generations or less and is related by blood, marriage or adoption.
These are some of the relatives in Cuba who can receive remittances from their family members in the United States:
- Great grandparents
- Aunts and uncles
- Great aunts and uncles
- Nieces and nephews
- Second cousins
- Great grandchildren
It’s important to point out that the US Department of Treasury prohibits sending remittances to any member of the Cuban Communist Party, regardless of family ties. This means that if your close relative in Cuba has a job in the government or has relatives who work in the government, you won’t be able to send them money from the United States.
Documents needed to send remittances from the U.S. to Cuba
Every Cuban remittance service has its own list of requirements. Generally, these are the documents you’ll need when sending money to Cuba:
- Government-issued photo ID
- Your beneficiary’s first and last name
- Your beneficiary’s home address
- Relationship to the beneficiary
In some cases, you may also need to provide the following information:
- Your beneficiary’s ID number
- Your relative’s magnetic card number in Cuba
If you wish to transfer funds via the Internet, you’ll also need to provide a credit or debit card to process the payment. Check out the PODERcard - a digital bank account built for the community - it could help you process the money transfer.
Despite the restrictions imposed by the U.S. government, there are still several remittance options to Cuba. The following are some of the available methods that you can use to send money to your relatives back home.
Bank transfers between the United States and Cuba are currently prohibited, because American banks cannot process financial transactions with Cuban banks.
However, many banks outside of the United States maintain commercial relationships with Cuban banks. If you opened and still have a bank account in another country, this institution may allow you to transfer money directly to your beneficiary’s bank account in Cuba.
American law also allows Cuban citizens who reside in the island to open bank accounts in the United States. This makes it easier to transfer money from one account to another, as long as they are within the list of authorized transactions. Before processing this type of transaction, account holders should also confirm that the bank’s internal regulations allow them to use their debit cards in Cuba.
Traditional remittance companiesToward the end of 2020, the U.S. government set up new regulations regarding remittances to Cuba. For this reason, traditional remittance services such as Western Union stopped offering their services to the island. Currently, these companies still don’t know if and when they will be able to resume their operations in Cuba.
Remittance restrictions to Cuba also limit the apps that people in the U.S. can use to send money to their relatives back home. Financial services applications that are headquartered in the United States are not allowed to offer their services in Cuba. These include companies such as PayPal or Payoneer.
Due to these regulations, we have seen the rise of alternative methods as a way to send funds to loved ones in Cuba. The following are some of the options that Cubans in the United States have to send money back to their relatives in the island:
Many Cubans in the United States send cash to their relatives in Cuba using “remittance agencies” or “packaging services.” Many of these companies use passengers who travel to Cuba to transport cash that is then delivered to beneficiaries at their homes.
Some well-known remittance agencies that offer home delivery services include:
It’s important to note that these agencies charge very high fees of up to 40% per remittance. It can also take up to two weeks for your beneficiary to receive the funds. For these reasons, they are not the most convenient way to send money to Cuba. However, many Cubans still consider them a reliable option.
AIS y MLC reloadable cards
Prepaid magnetic cards are another option to send Cuban remittances. The two types of cards are known as Freely Convertible Currency (MLC, for its acronym in Spanish) and American International Service (AIS, for its acronym in Spanish). Although these cards cannot receive money directly from the United States, American residents do have permission to use Canadian transfer companies to send money without government restrictions.
To use these types of services, you’ll first need to open an account with the remittance company. Keep in mind that since these are Canadian services, your transaction will be processed in Canadian dollars and you may notice a discrepancy due to the exchange rate.
Whenever possible, it’s best for your beneficiary to process their AIS or MLC card before you initiate the transfer. However, some of these companies can also process the cards on behalf of your family in Cuba as part of their services.
Your family members in Cuba can request their AIR or MLC cards without making an initial deposit. These cards don’t require a minimum balance, either. They work as a method of payment at certain establishments and allow your relatives in Cuba to purchase products in U.S. dollars.
Some of the companies that offer this service include:
Since cryptocurrencies are decentralized digital assets without an affiliation to any government or country, many Cubans in the United States consider them an easy and inexpensive way to transfer funds to Cuba.
The process is relatively simple. First, you need to buy the crypto currency that you want using your preferred exchange. Then, you can process an immediate transfer of tokens to your family member’s digital wallet in Cuba.
This is a safe and easy way to transfer money to Cuba. However, it’s important to remember that crypto currencies are highly volatile assets. They can lose a great deal of their value from one day to another.
Due to possible fluctuations and because crypto is not a legal tender in Cuba, your family members will need to sell them soon after receipt. After converting their crypto to Cuban pesos, your relatives will be able to make purchases or payments without any restrictions.
Crypto transfers have become so popular that specialty platforms have emerged to facilitate these transactions. Apps like Qvapay (Site only in Spanish) offer a reloadable crypto debit card. These types of services make it easier to exchange crypto for Cuban pesos, while also giving your relatives in Cuba more financial flexibility.
Informal methods are still among the most popular ways to send money to relatives in Cuba. There are people who travel to the island and promise to deliver funds to your relatives, in exchange for a commission. But there is a great deal of risk associated with this method. It requires that you give someone cash and trust that they will deliver it to your loved ones.
To avoid scams, we suggest that you steer clear from informal parcel services. If there is no other option, be sure to send the money with someone that you know personally. Let your family members in Cuba know that you’re sending them money and provide them with details on how much and when they can pick up their cash.
What Are The Remittance Fees From The United States to Cuba?
The costs of sending money to Cuba vary, depending on the method that you select. Previously, the Cuban government charged a 10% tax on U.S. dollar remittances. This added to your costs and made it even more expensive to send money to Cuba. Due to the COVID-19 pandemic, Cuba recently eliminated this tax in an effort to reactivate its economy.
Many of the services that deliver cash at home charge a fixed fee for this type of service. These costs can be up to $20 for every $100 that you send. Before hiring these services, confirm the costs and make sure they don’t charge additional fees.
A percentage applied to the exchange rate
If you prefer to use reloadable AIS or MLC cards, the cost of sending money to your loved ones tends to be between 30 and 40% of the remittance. This is because you’ll first have to convert U.S. dollars into Canadian dollars, and then you’ll have to pay for transfer costs. As with fees per transaction, it’s always best to confirm fees before processing any money transfers.
The quickest way to send money from the U.S. to Cuba
Transferring crypto currency is the quickest way to process remittances to Cuba. Due to their immediacy, your family members can receive crypto currencies in a matter of minutes. However, it’s important to remember that sending crypto requires a second step. Your family members will need to sell these digital assets to get Cuban pesos.
How Long Does a Transfer From The U.S. To Cuba Take?
Due to government restrictions, money transfers from the United States to Cuba take longer than other countries. Remittance agencies may take up to two weeks to deliver the funds, but they also bring it to your family member’s home.
Reloading AIS or MLC cards takes approximately two days. Some companies offer express reloading services, which can be available in 1-3 hours. The disadvantage is that these cards don’t allow your family members to withdraw cash. They only work at authorized establishments.
How Much Money Can You Send To Cuba?
Amendments made to the Cuban Assets Control Regulations (CACR) on September 9, 2019 imposed new limits to Cuban remittances. Since these changes were enacted, U.S. residents can send a maximum of $1000 to close family members in Cuba every 90 days. This means that the most someone in the United States can send to Cuba is $4000 per year.
Violating these rules can result in criminal and civil penalties. Prohibited transactions could be punished with an embargo from the Office of Foreign Assets Control, causing you to lose your property or money. And the Code of Federal Regulations indicates that financial institutions are obligated to report any suspicious activity that could violate these rules to the U.S. Department of Treasury.