Inside Gaza's Cash Famine: How Residents Struggle with Unreliable Online Payments and Worn Banknotes

In Gaza City's Bahloul Junction, stores providing free internet allow people to make online payments. In a clothing shop in Gaza City’s Sheikh Radwan neighbourhood, Firas Zaqloul stands helplessly as he tries to pay for his purchases because the seller refuses his money.

Zaqloul’s home was destroyed during Israel’s war on Gaza, burying his Palestinian identity card beneath the rubble. Without it, he has been unable to open a bank account or electronic wallet, leaving him dependent on scarce and badly worn banknotes that many merchants refuse to accept. "I suffer every day when I want to buy something," Zaqloul said. "The seller refuses worn-out banknotes, so I have to find some way to pay him."

This experience has become increasingly common in Gaza, where an acute shortage of usable cash is known locally as a "cash famine." Since the war began on October 7, 2023, Israel has severely restricted the entry of cash into Gaza, and its military campaign has devastated much of the territory’s banking infrastructure. According to the Palestine Monetary Authority, Israeli attacks have destroyed more than 50 bank branches across Gaza, as well as dozens of cash machines, trapping large quantities of cash inside damaged vaults.

Even after banks reopened some branches, services remained limited largely to administrative transactions without providing new liquidity. Palestinians find it difficult to open new accounts using replacement identification documents issued after 2023, depriving thousands of people of access to the electronic banking system.

At the same clothing store, 23-year-old student Israa Najm waits for a notification on the shopkeeper’s phone. "As you can see, I have been standing here for two hours, waiting for my mother to transfer the money to the shop owner from home," she said. Najm noted that her wartime identity document is not accepted by banks, preventing her from operating her Bank of Palestine account or electronic wallet.

Due to the lack of cash, everyday transactions are heavily complicated. Inside Abu Jabara Food Mall, 45-year-old Najwa Kahil struggles to buy food because electronic payments make it harder to haggle and she has trouble using payment apps on her old phone. "I take my young son with me so he can call one of his brothers to make a transfer to the supermarket owner," Kahil said.

For 22-year-old nut seller Mohammed Awida, shopping requires extensive planning and charging his phone beforehand. Internet outages add further complications, forcing some merchants to rely on mobile phone services that generate SMS confirmations. "Without that message, the seller isn’t convinced that you’ve paid," Awida said.

The collapse of Gaza’s communications infrastructure and the shift to electronic payments have reshaped commerce. Businesses offering free internet connections have become informal hubs. At Bahloul Junction in western Gaza City, 14-year-old Abdul Hadi Abu Shaaban sells bread outside al-Qadi sweets shoppe, relying on free Wi-Fi to receive online bank payments through customers and their families.