Hamas Faces New Financial Crisis Amid Israeli Crackdown on Funding

Hamas is experiencing a new financial crisis in the Gaza Strip, characterized by merchants refusing to accept cash and insisting on electronic payment applications for all transactions. Sources indicate this stems from Hamas's reliance on cash to pay its operatives, the Qassam Brigades, and government employees, leaving them with unusable funds. The organization has mobilized its media and social media activists to attack Palestinian banks promoting electronic transactions. These activists are reportedly spreading fear among Gazans, claiming that abandoning cash could lead to the collapse of electronic systems during potential future wars with Iran and the United States, thus making cash the only viable option.

The situation has intensified with recent Israeli military actions in Gaza, resulting in casualties. The new reality is a dominant topic of discussion, particularly among Hamas activists struggling to convert their cash into electronic funds. Some merchants are reportedly charging a 10% commission for this conversion, citing the poor condition of cash in Gaza and Israeli requirements to conduct business through electronic bank accounts rather than cash.

This financial strain coincides with an intensified Israeli campaign to assassinate Hamas financial officials and cashiers. The latest casualty was businessman Shadi Abu Hseira, who was killed in a vehicle bombing in Gaza City on Sunday. The Israeli military and Shin Bet announced on Friday the elimination of 16 prominent figures in Hamas's financial network during the war, disrupting a money transfer system operating through Turkey and Gaza. They stated these individuals were involved in transferring over $1 billion to fund Hamas activities through a network of exchange offices in Turkey and Gaza.

Despite these challenges, Hamas continues to pay its Qassam Brigades members and movement employees regularly, albeit at reduced rates of up to 60% of their salaries, with payments of at least $350. Government employees receive a smaller amount, approximately 1,000 shekels every 100 days, in worn-out cash. Hamas partially overcomes its financial difficulties by collecting taxes from merchants importing goods, through its municipal governments, market regulations, and small businesses. Special Qassam Brigades units reportedly abduct and extort significant sums from merchants who refuse to pay taxes. The movement also collects substantial donations from abroad through its external officials and prominent media figures.

While Hamas possesses significant funds abroad, it faces difficulties transferring them to Gaza, sometimes succeeding through intermediaries, merchants, or individuals serving the movement without direct affiliation. A recent investigative report revealed an undeclared financial influence triangle involving Hamas, major merchants and exchange offices, the Palestinian Monetary Authority, and direct Israeli pressure, which has created a system for money circulation and liquidity assurance amidst political divergence.