Palestinian digital financial transformation

The Palestinian financial sector has seen a significant increase in digital transformation and financial inclusion. By mid-2026, the Palestinian Monetary Authority reported that adult financial inclusion rose to 73%, up from 64% in 2025. This growth was driven by an increase in bank account holders to approximately 1.8 million and digital wallet users reaching roughly 2 million. Notably, female financial inclusion improved from 48% to 60% during this period.

This shift has evolved into a broader digital surge, with electronic payment systems recording over 126 million transactions totaling approximately $35 billion. Nader Al-Salehi, General Manager of the Palestine Electronic Payment Services, characterized this development as a “revolution in digital transformation,” noting that movement and travel difficulties have compelled the adoption of electronic payments over cash. The “Ay Buraq” instant transfer system has been a major component, accounting for nearly half of the transaction volume.

As of late August 2026, the banking sector continues to navigate complex challenges despite these digital advancements. While core indicators remain stable—with customer deposits exceeding $23 billion and credit facilities surpassing $13 billion—banks are facing high liquidity pressures. Key risks include the accumulation of Shekel surpluses, a government financial crisis, and potential disruptions in payment channels with Israeli banks. In Gaza, the difficulty of handling physical cash has specifically accelerated the adoption of digital services, helping to maintain liquidity within the formal banking system. While the system remains solvent, experts note concerns regarding the geopolitical environment and the increasing shift of credit toward the public sector.