14ymedio, Elías Amor Bravo, Economist, October 6, 2023 — There is more news about bancarización.* The state press analyzes the relationship between agromarkets and electronic payments and describes it as “a union that is not yet consolidated.” It’s a good example that bancarización as a hierarchical order issued by the regime, mandatory for all, is not well focused. The reason? It has already been highlighted in previous entries. Cubans prefer to make cash payments and use paper money. They don’t trust the banks and what the communists call “electronic payments.” What is not in demand can hardly get anywhere. The law of supply and demand makes its way inexorably into the Cuban communist economy. What we are seeing is a rebellion of the Cuban people against the regime, and we will see who wins.
The state press complains that in certain areas of the country there is slowness and resistance when it comes to adopting electronic commerce mechanisms in agromarkets. In these spaces in which many Cubans solve their basic food needs, bancarización is of no interest. Neither to buyers nor to sellers, and, therefore, in businesses that now have the QR Code for payment, the use of electronic means is almost null. Interesting.
This information is not trivial. In those agromarkets, thousands of transactions take place every day that materialize, apparently, in cash. People don’t use electronic mechanisms, despite having the facilities for it. The payment by digital e-commerce platforms for one or two malangas (sweet potatoes), a few bananas and two or three mangoes does not justify using bancarización.
And although it’s true that the average transaction in these agromarkets is small in value, although at current prices nothing is cheap in Cuba, as numerous operations are carried out every day, the weight of operations in the total retail market is very high, and this lowers the regime’s expectations to extend bancarización to all branches of the economy. People pay in cash not only for food. In these agromarkets, many other transactions escape the trap of electronic payments, like the training of workers and the leasing of premises.
It’s in this area of the agromarkets where it will be very difficult for the regime to achieve the integral bancarización of operations, and, therefore, it will continue to handle paper money and cash in transactions, which will require people to have those funds. And of course, since what is happening in the agromarkets does not please the leaders, the state press contemplates the spontaneous process of transactions between buyers and sellers as the “survival of the fittest without regard for the rules” and insists that agromarkets should not be allowed “the stealing that lends itself even to not paying taxes.” Unbelievable.
It then claims that rents for the market stalls by the Provincial Property Management Company should be paid compulsorily by electronic commerce using the EnZona platform, in addition to the cash charge, which must be reduced to the minimum expression. The complaint goes further and says that in the areas leased to the self-employed, the “providers only take cash.” And this should not be allowed.
Faced with this pressure from the authorities to implement bancarización, even if it is not among most people’s priorities, opinions begin to divide. And so appear those who believe that the use of cards is not complicated and that people should get used to it. Even those who provide the Extra Cash service, which gives cash to buyers in the agromarkets to make up for the poor functioning of ATMs, received a recommendation to change procedures and use electronic payments, despite the fact that the population, in general, positively values having the Extra Cash.
From the perspective of agromarkets it seems evident, as the state press points out, “that there is a long way to go to make bancarización effective and to provide access for most of the population to electronic payment channels, no longer as an option for suppliers, but as an indispensable condition when providing a service or marketing a product.”
The regime’s imposition of bancarización is taking place at a particularly complicated time in the Cuban economy, where stagflation drags economic operators into a vicious circle in which internal and external imbalances limit the ability of the authorities to get out of the dark hole.
Nothing that is mandatory and that doesn’t respond to the real needs of society can be successful. Neither producers nor consumers have the slightest interest in electronic payments in agromarket transactions, even indirect ones. Forcing and compelling them is a serious mistake that can lead to a reduction in transactions, with devastating effects on private consumption.
The most serious thing is that Acopio, the state monopoly on the distribution of agricultural products, is also not offering signs of incorporating electronic payments into its operation, despite the orders received. The incorporation of QR codes of the EnZona platform in the aisles and agromarkets, and the actions to install Point of Sale Terminals (TPV or POS) in businesses aren’t advancing at the necessary pace, and numerous Acopio transactions continue to be carried out in cash, with the use of electronic means being almost non-existent in some places, as the state press points out.
The regime’s propaganda emphasizes that the elderly are the ones who pose the most problems in making electronic payments, while young people do not. They should worry about it, since Cuba’s aging trend forces them to be very careful with the needs and preferences of the elderly, who in many cases do not have mobile phones or other devices. Likewise, the regime concentrates its attacks on sellers, who are described as unprepared and unwilling to incorporate electronic payments, without taking into account that if this is the case, it’s because their customers don’t want it.
The agromarkets give a blow to the regime’s bancarización strategy. They are not the only ones. The chosen path, to order and command, is not the most appropriate.
*Translator’s note: Bancarización— banking reform –in effect since August 3, 2023, is a set of measures intended to move Cuba to a “cashless” society based on electronic banking. So far, the fast-falling peso, soaring consumer prices, the inability of the Island’s infrastructure — subject to constant blackouts — to support required elements as simple as ATMs, along with widespread distrust among the population, have stymied the effort.
Translated by Regina Anavy
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