Gaza’s cash crisis turns digital wallet outages into daily hardships

In Gaza, a technical problem in one digital wallet can mean no food on the table, no transport home and no way to complete the simplest daily transactions.

That reality became clear Sunday when a disruption in the local PalPay service caused hours of confusion across the enclave, halting shopping, transport and financial dealings in a place where life has become heavily dependent on electronic payments.

What would be a minor technical issue elsewhere quickly turned into another humanitarian burden in Gaza, where war, severe cash shortages and the collapse of normal banking systems have pushed Palestinians into a near-total reliance on digital wallets.

For more than two years, residents have depended on PalPay along with Jawwal Pay and several banking applications to manage everyday payments.

The shift was not voluntary.

Since October 2023, Israel has barred the entry of new paper currency into Gaza, worsening a severe liquidity crisis and forcing residents to rely on worn-out banknotes often rejected in daily purchases.

The Israeli shekel remains the main currency used for salaries, trade and daily purchases, but much of the available cash has become too damaged for practical use.

As a result, many Palestinians were forced to move to digital payments, even for bread, transport fares and small daily expenses.

A fragile system

But the system itself remains fragile.

Frequent electricity cuts, unstable internet access and weak network coverage mean electronic payments often depend on infrastructure that barely functions.

Sunday’s disruption exposed just how vulnerable that reality has become.

Several Palestinians told Anadolu they were forced to leave markets without buying food after discovering the wallet was not working.

Others said they were left stranded without access to already limited public transport in the war-battered enclave.

With fuel shortages and damaged roads reducing transport options since the start of the war, many residents now rely on trucks or even animal-drawn carts for movement, with digital wallets often used to pay fares.

A source familiar with the matter told Anadolu that PalPay was carrying out maintenance and technical upgrades aimed at improving service reliability and reducing dependence on internet access.

The source, who asked not to be named because he was not authorized to speak publicly, said the outage lasted several hours before service gradually returned.

More than a technical failure

For economist Ahmad Abu Qamar, the incident revealed something deeper than a technical failure.

“Electronic payment in Gaza is no longer a modern convenience. It has become a direct reflection of an economic crisis far beyond liquidity shortages,” he told Anadolu.

He said people had been pushed into digital finance without the infrastructure needed to support it.

“When buying bread, paying transport fares or sending a small amount of money depends on internet speed, transfer limits and system stability, this is not economic development. It is crisis management with incomplete tools,” he said.

Abu Qamar warned that digital payments can help stimulate markets and improve financial inclusion, but in a fragile environment like Gaza, they have also become an additional burden that disrupts daily life and weakens public trust.

“The economy is not measured only by the existence of tools, but by people’s ability to use them with confidence and stability,” he added.

A US-backed ceasefire agreement has been in place in Gaza since Oct. 10, halting Israel’s two-year war that killed more than 72,000 people, mostly women and children, and injured over 172,000 others since October 2023.

*Writing by Tarek Chouiref