GAZA CITY, Gaza Strip — In a weekly Cabinet meeting held June 5, the Palestinian Authority (PA) approved a national plan to promote the use of electronic payment methods. The plan calls for developing the legal environment for e-payment, promoting electronic payment in the finance and banking sectors and strengthening the regulatory framework for clearance system and electronic payment services providers.

E-payment systems cover transactions using credit, debit and shopping cards and online bank transfers, reducing reliance on cash and checks. The plan aims to support diverse and accessible e-payment options so they become more widely available and meet the needs of the finance and banking sectors as well as individuals and consumers.

The plan stems in part from several obstacles the Palestinian banking system faces. In 2017, banks in the West Bank and Gaza sometimes ran low on US dollars and Jordanian dinars and were unable to replace damaged and worn bills, which Israeli banks also reject. In addition, a severe cash liquidity shortage ensued after a 50% cut in salaries for PA employees in Gaza and restrictions placed on hard currency and the shekel by Israel as part of the ongoing blockade of the besieged enclave.

Buraq Nabulsi, the director general of the Palestinian Capital Market Authority (PCMA), told Al-Monitor that the e-payment project is expected to launch within two months. “This is an ambitious plan for the banking, financial and corporate sectors as well as for individuals,” he said. “It is to be implemented by the Palestinian Monetary Authority [PMA] and the PCMA in cooperation with e-payment solutions providers in the Palestinian territories. E-payment will ease the critical situation of Palestinian banks in the West Bank and Gaza Strip encountering difficulties hindering the transfer of funds from Israeli banks to Palestinian banks.”