The effect of electronic payment in alleviating the cash liquidity crisis in Palestinian banks operating in the Hebron and Bethlehem governorates.

Description

Background: Palestinian banks face a recurring shortage of physical cash, driven largely by the accumulation of surplus Israeli shekels that cannot be transferred out of the banking system, along with limited control over monetary tools and a strong public preference for cash transactions. This creates operational pressure on banks, delays in customer service, and risks to financial stability. Electronic payment systems (e-wallets, mobile banking, point-of-sale terminals, card payments, and interbank electronic transfers) offer a potential way to reduce dependence on cash and ease this pressure. Aim: This project examines whether, and to what extent, the adoption of electronic payment methods helps reduce the cash liquidity crisis in Palestinian banks operating in the Hebron and Bethlehem governorates. Objectives: To measure the level of electronic payment adoption in banks in the two governorates. To assess the impact of electronic payment on cash liquidity indicators, such as cash handling volume, cash demand pressure, and liquidity management efficiency. To identify the obstacles that limit wider use of electronic payments (infrastructure, customer trust, regulation, digital literacy). To propose practical recommendations for banks and policymakers. Methodology: A descriptive-analytical approach using a structured questionnaire distributed to bank employees and managers in Hebron and Bethlehem, analyzed with statistical tools such as SPSS or SmartPLS, with regression analysis to test the hypotheses. Expected Contribution: The study should provide local evidence on the role of FinTech and digital payments in strengthening liquidity management in a constrained banking environment, and offer insights for the Palestine Monetary Authority and commercial banks on promoting a less-cash economy.