Challenges and Opportunities of Marketing Remittances to Cuba
This report provides an overview of:
- The ways and mechanisms in which remittances are sent to Cuba;
- The players in the market;
- Opportunities for the money transfer industry to penetrate the market.
- Profiles the Cuban American senders of remittances;
- Reviews the informal money transfer groups and offers a general overview of their structure, costs, and operations;
- Addresses the formal money transfer groups reviewing a range of companies operating in Cuba from the United States and Canada;
- Offers some strategies to market remittances to Cuba and increase the share in the business.
The paper also states that in the majority of cases, remittances are transferred through a variety of informal or semiformal mechanisms. This informality poses a challenge to money transfer companies as to how to market remittances to Cuba through their formal channels:
- One important reason for the reliance on informal and semi- formal means of remitting is current U.S. legislation;
- These laws also create a competitive disadvantage for the U.S. industry compared to formal counterparts.
The paper concludes with the prospect of this market in future:
- The prevailing structure of the remittance market is particularly cumbersome given the presence of a large informal sector and a diffuse formal market;
- Family remittances to Cuba continue to be a political issue;
- Opportunities to improve the money transfer business depends on:
- Continuity of exchange,
- Improving connections,
- The effect of social networks.