The reinstatement of diplomatic ties between the US and Cuba is expected give a big boost to the Cuban economy. US companies in the hospitality industry like Airbnb and Starwood clearly stand to benefit, but so do financial companies that can help businesses expand to the US and move money in and out of Cuba.
Firms including PayPal, Western Union, and online-payment processor Stripe have already announced pushes into Cuba.
PayPal CEO Dan Schulman said in a blog post that the company plans to make its newly-acquired remittance service, Xoom, available in Cuba by the end of the year. Similarly, Western Union said it hoped to expand its cross-border payments service to Cuba by the end of the second quarter of 2016. The company says it already has 490 agent locations across Cuba.
Remittance payments to the Caribbean island reached $2.8 billion last year, 90% of which came from the US, Western Union said in a press release.
According to an April 2015 survey, 70% of Cubans are interested in opening their own business. With the US so close by, there is significant potential for Cuban businesses to expand to the US. Stripe announced last week (March 18) it would expand its new Stripe Atlas product to Cuba. Stripe Atlas, which launched last month in a private beta, reduces the regulatory and logistical burdens entrepreneurs face when trying to start or expand a business in the US. The service handles the legal, financial, consulting, and payments side, for a $500 flat fee.
To jumpstart that business, Stripe partnered with the Cuba-based Merchise Startup Circle, which will refer startups from the local community to Stripe Atlas.
“We’re playing a long game,” Stripe’s chief business officer Billy Alvarado told Quartz. “But it’s a very interesting opportunity.”