Israeli restrictions and war damage have created a liquidity crisis, impacting Gaza’s banking system and daily commerce. In Gaza City’s Sheikh Radwan neighborhood, Firas Zaqloul struggles to pay for purchases due to the refusal of sellers to accept worn banknotes. Zaqloul's home was destroyed during the conflict, and without his Palestinian identity card, he cannot open a bank account or electronic wallet. He expressed frustration over the situation, stating, "I suffer every day when I want to buy something."
The term "cash famine" has emerged locally to describe the acute shortage of usable cash in Gaza. Since the conflict escalated on October 7, 2023, Israel has imposed severe restrictions on cash entry into Gaza, while military actions have damaged much of the territory’s banking infrastructure. The Palestine Monetary Authority reported that over 50 bank branches and numerous cash machines have been destroyed, trapping large amounts of cash inside damaged banks.
Even after the ceasefire in October 2025 allowed some bank branches to reopen, services remained limited to administrative transactions, failing to provide the necessary liquidity. Many Palestinians in Gaza face difficulties opening new accounts due to the use of replacement identification documents issued after 2023, limiting access to electronic banking at a time when digital payments are increasingly necessary.
In a clothing store, 23-year-old student Israa Najm waits for a notification on the shopkeeper’s phone to confirm a money transfer from her mother. She noted that her identity document is not accepted by banks, preventing her from accessing her Bank of Palestine account or electronic wallet. "Every time I want to go to the market, I have to call my mother and ask her to transfer the money," Najm explained.
The lack of cash complicates everyday transactions. Najwa Kahil, 45, expressed frustration with electronic payments, stating that they hinder her ability to negotiate prices. She relies on her son to assist with transactions due to her outdated phone. "I spend all day just suffering," Kahil said.
Mohammed Awida, a 22-year-old nut seller, described the new complexities of shopping, stating that purchasing food now requires careful planning. Internet outages further complicate transactions, as some merchants prefer SMS confirmations for payments, which require a stable internet connection.
The collapse of Gaza’s communications infrastructure and the shift to electronic payments have altered business practices, with shops offering free internet becoming informal commercial hubs. At Bahloul Junction in western Gaza City, 14-year-old Abdul Hadi Abu Shaaban sells bread outside a shop where customers can connect to Wi-Fi. He explained that he asks buyers to transfer money to his father’s bank account, as he does not accept cash due to its poor condition.