Gaza's Cash Crisis: Daily Choices Between Worn Notes, Digital Hurdles, and Debt

Life on the Brink: Navigating Gaza's Severe Cash Shortage

In the devastated enclave of Gaza, the simplest acts of daily life have become Herculean tasks. Palestinians are battling an acute cash shortage, a direct consequence of the ongoing conflict, transforming routine transactions into a complex web of challenges for families.

The Human Face of Financial Scarcity

Amidst the usual bustle of Gaza City's Remal neighbourhood, Samar Abu Harbied, a 45-year-old housewife, finds herself at a makeshift roadside stall. She's not just buying groceries for her family's Iftar meal during Ramadan; she's negotiating survival. With no cash, she relies on credit, hoping her husband or son can later wire funds to the grocer.

"I haven't touched a paper note for months. I don't even have money for a taxi. Now, we walk a lot, for long distances," Abu Harbied recounts, highlighting the profound shift in her daily routine.

Her experience mirrors that of Najlaa Sukkar, 48, who, breathless from a long walk, arrived at the same stall run by her son, Abdallah. Najlaa's journey to see a doctor for a post-surgery check-up and buy medication was in vain. The 20-shekel banknote she possessed was so tattered it was rejected by the pharmacist, and she lacked the 30 shekels (approximately US$9.5) for the consultation.

"I returned without receiving medical care... At the pharmacy, they didn't accept the banknotes as they were frayed. The taxi driver didn't accept a banknote, only small change, which I don't have. It is very difficult to get by. What a mess, we don't know what to do!" she lamented to Al Jazeera, painting a vivid picture of the impossible situation.

From Banknotes to Digital: A Forced Evolution

The Israeli shekel, Gaza's primary currency, is now critically scarce. The war, which began in October 2023, brought an immediate cessation of new banknotes and coins from Israel. This, coupled with the destruction of an estimated 90 percent of bank branches and ATMs, has crippled the traditional financial system. A US-brokered ceasefire offered little relief, leaving residents dependent on worn-out notes from before the conflict.

This dire situation has spurred a forced migration to digital payment systems. The Palestinian Monetary Authority, in collaboration with internet service providers, has promoted mobile-based solutions like PalPay and Jawwal Pay to mitigate the liquidity crisis. Shady, Samar Abu Harbied's son, is a prime example of this transition.

"My son, Shady, was receiving his daily wage in cash, which was worn and torn. We could hardly break it into smaller change or buy anything, as sellers don't accept overused paper bills... Now, as he is paid into his bank account, we buy everything through bank apps," she explained, detailing the practical benefits of the shift.

New Solutions, New Hurdles: The Digital Divide

While electronic payments offer a lifeline, they also introduce a fresh set of challenges. A significant portion of the population lacks access to bank-transferred salaries or even smartphones. For those with devices, maintaining a charge is a constant battle in an area plagued by severe electricity shortages. Furthermore, finding a stable internet connection for transactions is often an unreliable luxury.

Samar Abu Harbied illustrates this daily struggle: a market trip often necessitates her husband or son accompanying her to handle payments, but their work commitments make this impossible. "I prefer cash in my hand; I could buy anything on the go," she expressed, articulating a common desire for tangible currency in a world increasingly reliant on fragile digital networks.In Gaza, when money is scarce, every choice counts: Bank, cash, or credit?The answer is rarely straightforward, often fraught with frustration and uncertainty.

The Erosion of a Formal System: A Survival Economy Emerges

Experts describe Gaza's financial landscape as having transitioned from a liquidity crisis to a fragmented survival economy. Ahmed Abu Qamar, a board member of the Palestinian Economists Association, notes the structural shift:

"As the months passed, the crisis evolved into something far more structural. The black market now plays a dominant role in determining liquidity conditions. A small group of traders effectively manages cash circulation through high-commission cashing operations."

This signals a severe distortion where money itself becomes a commodity, its value dictated by supply and demand rather than its nominal worth. The formal banking sector and the Palestinian Monetary Authority have been effectively sidelined, leading to a "neutralisation of the formal monetary system."

Beyond Cash: A Crisis of Confidence

Abu Qamar highlights that the deeper issue is a profound loss of confidence—not just in physical cash, but in the entire financial infrastructure. While electronic payments offer traceability, which can be a double-edged sword (prone to freezing or restriction), an abrupt transition without adequate infrastructure and trust creates severe economic and social distortions.

Gaza's financial struggles underscore a complex humanitarian crisis where fundamental economic stability has been replaced by informal, often desperate, coping mechanisms. The choices are limited, the solutions imperfect, and the daily grind of managing money continues to be a profound test of resilience.