International Business

Mastercard gives OK for credit card use in Cuba

Come March 1, American travelers will be able to slap down their MasterCards in Cuba and use plastic to pay for their hotel or mojitos.

The Purchase, N.Y., company said Friday that starting in March it would stop blocking transactions on U.S.-issued cards in Cuba.

It was one of the first moves by a major U.S corporation since the Treasury Department released guidelines Jan. 15 on expanded travel and trade with Cuba as part of the Obama administration’s effort to normalize relations.

MasterCard said the action was based on “recent guidance” from Treasury’s Office of Foreign Assets Control.

“MasterCard will work with its U.S. issuers to support their Cuba-related activities and decisions,” the company said.

But it advised U.S. cardholders to check with their bank before traveling to Cuba to make sure their cards will be supported on the island.

MasterCards issued by banks outside the United States are already accepted on the island.

Although several small private business owners in Cuba said recently that they wouldn’t have a problem accepting credit cards if banks would provide them with point-of-sale devices, currently credit card payments are limited to government-run enterprises.

Allowing Americans to use U.S.-issued credit and debit cards in Cuba was one of the big changes that President Barack Obama announced Dec. 17 when he revealed that after 18 months of secret negotiations, Cuba and the United States planned to renew diplomatic ties.

As part of the new rules, U.S. banks also will be able to open correspondent accounts at Cuban financial institutions to handle authorized transactions. All transactions related to the processing and payment of credit and debit cards, checks, drafts and other financial instruments are also permitted.