American Express announced that it plans to start operating in Cuba in the wake of the Obama administration lifting bans on U.S. financial institutions doing business there.
American Express said that its business activities would fall within the new rules drafted by the Treasury Department’s Office of Foreign Assets Control.
The Miami Herald reported that last week, MasterCard was the first U.S. credit card company to announce that it will stop blocking Cuban transactions on its cards on March 1.
“I can’t tell you when our cards will be working in Cuba,” American Express vice president Marina H. Norville said on Tuesday.
“But we are planning to do business in Cuba.”
American Express is trailing its rival, MasterCard, because of a lack of operations infrastructure.
“We have not had merchant relations or terminals set up,” Norville said.
It’s been a little over a month since Obama announced new ties with Cuba after more than 50 years of an economic embargo imposed on the island nation by the United States. The Inquisitr reported that retired ruler Fidel Castro appeared to offer a cautious endorsement of the move to improve relations between the two countries.
“Any peaceful or negotiated solution to the problems between the United States and the peoples or any people of Latin America that doesn’t imply force or the use of force should be treated in accordance with international norms and principles,” Fidel Castro said.
“We will always defend cooperation and friendship with all the peoples of the world, among them our political adversaries.”
The announcement to do business in Cuba comes just days after American Express announced that it will cut more than 4,000 jobs from its U.S. and international operations.
“The actions we are taking will impact over 4,000 people at a cost of $313 million in the quarter,” American Express CFO Jeff Campbell said.
The Financial Express reported that American Express had 62,800 employees at the end of 2013. A loss of 4,000 jobs accounts for about six percent of its workforce. But Campbell claims that the job cuts will be absorbed by the creation of new jobs.
According to the Wall Street Journal, American Express is “struggling to meet target revenues in a competitive environment.” American Express fell short in achieving its growth target of eight percent for 2014, reporting just over a six percent increase in total revenue, at $9.11 billion for the year. American Express’ fourth quarter profits also came in higher at $1.45 billion, compared to $1.31 billion last year.