Challenges and Opportunities of Marketing Remittances to Cuba

Transfer of remittances through a variety of formal and informal sources
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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.

This report:

  • 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.

About this Publication

By Orozco, M.