Gaza forced to use unreliable online payments amid ‘cash famine’

Gaza faces a severe liquidity crisis, with residents unable to access cash or electronic banking services after Israeli restrictions and war damage crippled the territory’s financial infrastructure. The shortage of usable money has been dubbed a “cash famine,” forcing people to rely on unreliable online payments and informal networks to buy everyday goods.

The war that began on 7 October 2023 saw Israel block the entry of new cash into Gaza and target the region’s banking system. The Palestine Monetary Authority reports that more than 50 bank branches and dozens of ATMs were destroyed or rendered inoperable. Large amounts of cash were trapped in vaults of damaged banks, and even after the ceasefire in October 2025, banks reopened only for limited administrative transactions. New accounts cannot be opened for residents using replacement identification documents issued after 2023, leaving thousands unable to use electronic wallets or Bank of Palestine accounts.

In Gaza City’s Sheikh Radwan neighbourhood, shopkeeper Firas Zaqloul tried to pay for clothes with worn banknotes but was refused. He explained that his identity card was buried in the rubble of his home and that without it he could not open a bank account. “The seller refuses worn‑out banknotes, so I have to find some way to pay him,” he said. “I just hope merchants in Gaza will take the money from us. In the end, it’s all money.”

The problem is widespread. A 23‑year‑old student, Israa Najm, waited two hours for her mother to transfer money to a shopkeeper’s phone. The shopkeeper would not let her leave with the abaya until the transfer confirmation appeared. Najm’s replacement ID is not accepted by banks, so she cannot operate a Bank of Palestine account or an electronic wallet. “Every time I want to go to the market, I have to call my mother and ask her to transfer the money,” she said. “Sometimes she doesn’t have internet, so we both struggle just to make the payment.”

In the Abu Jabara Food Mall, 45‑year‑old Najwa Kahil described how electronic payments hinder haggling and create difficulty for people with older phones that cannot run banking apps. “I take my young son with me so he can call one of his brothers to make a transfer to the supermarket owner,” she said. “Sometimes I feel I’m begging when I go out to buy; I feel like I’m 100 years old, not 45.”

For 22‑year‑old nut seller Mohammed Awida, buying food has become a “complete operation that requires preparation.” He charges his phone a day in advance and ensures he has access to every electronic payment method demanded by different sellers. Internet outages add another layer of complexity. Some merchants require SMS confirmations from mobile phone services to verify payments, as banking applications need an internet connection that may disappear. “Without that message, the seller isn’t convinced that you’ve paid,” Awida said.

The collapse of Gaza’s communications infrastructure has pushed businesses to offer free Wi‑Fi to facilitate transactions. At Bahloul Junction in western Gaza City, 14‑year‑old Abdul Hadi Abu Shaaban sells bread outside al‑Qadi sweets shop, where customers can connect to a free Wi‑Fi network. He accepts transfers to his father’s bank account and asks buyers to show the transfer notice. “I don’t receive cash, because all of the cash is old and worn out, and even if I had change, I couldn’t give it to the buyer,” he said.

The shift toward electronic payments and the scarcity of usable cash are reshaping commerce in Gaza. Merchants and customers increasingly congregate at locations that provide reliable internet connections, creating informal commercial hubs. The continued lack of liquidity, coupled with damaged banking facilities and restrictive Israeli policies, has left many Gazans struggling to purchase basic goods, while merchants remain wary of accepting worn banknotes or unreliable digital transfers.