Visa and Mastercard, the two largest card-payment networks, suspended acceptance of Cuban-issued payment cards as their correspondent banks retreated from exposure to GAESA (the Cuban military's business conglomerate) ahead of the 5 June OFAC deadline 12. A correspondent bank is the intermediary that clears a transaction between a Cuban-issued card and the global network; when those intermediaries exit, the card stops working at the till.
The suspension traces back to the same Executive Order 14404 designation of 18 May . GAESA controls the financial infrastructure behind Cuban card processing, so a sanction on the conglomerate reaches the rails themselves rather than any single bank. The card networks did not need to be designated; the banks that connect them to Cuba simply declined the secondary-sanctions risk and pulled back.
The damage falls in two directions at once. A visitor can no longer pay by card even at a hotel that stays open, and a Cuban household that kept savings on a card balance cannot spend them. The peso's slide to a record 600 (covered in this dispatch) is partly this: when the electronic dollar channels close, more demand crowds into the informal cash market that El Toque tracks.
