payment scams — Payment scams in Cyprus surged by 34% in the second half of 2024, according to a report from the Central Bank of Cyprus (CBC). The total volume of fraudulent transactions reached 14,000, while the monetary value escalated by 26% to €3 million.
- On the other hand, traditional payment methods such as cheques and direct debits recorded negligible incidents, indicating that the majority of scams are concentrated within electronic transactions.
- The CBC's findings underscore the importance of ongoing awareness and preventative measures to combat payment fraud, especially in an increasingly digital economy.
Despite this significant rise, Cyprus still reported fewer incidents compared to the eurozone average. In contrast, the eurozone experienced a smaller increase, with a rise of 7% in transaction volume and 22% in value.
A staggering 94% of the fraudulent cases in Cyprus involved card payments, totalling 13,000 incidents. However, these accounted for only €1.2 million, representing 39% of the overall losses. The CBC noted that almost all of these incidents involved unauthorised transactions, with 95% occurring online. Instances of fraud at physical points of sale remained minimal.
Conversely, credit transfer fraud, although less frequent, resulted in significantly higher financial losses, estimated at around €1.8 million or 60% of total losses. The predominant issue in this category was payer manipulation, commonly known as authorised push payment (APP) scams, which constituted three-quarters of such cases.
Cross-border transactions emerged as a particular area of vulnerability. The report revealed that card payments made outside Cyprus were 25 times more likely to be fraudulent than domestic transactions, while cross-border credit transfers carried a tenfold risk. This highlights the need for increased vigilance when engaging in international payments.
In a positive note, the report identified strong customer authentication (SCA) as an effective protective measure. Transactions where SCA was applied had scam rates five times lower than those without it. This suggests that adopting enhanced security measures could play a crucial role in mitigating fraud.
On the other hand, traditional payment methods such as cheques and direct debits recorded negligible incidents, indicating that the majority of scams are concentrated within electronic transactions.
Despite the alarming rise in scams, the overall impact remains minimal when considering the total volume of payments. Payment fraud accounted for less than 0.002% of overall card transactions and 0.01% of credit transfers, demonstrating that while the increase is concerning, it still represents a small fraction of the payment landscape in Cyprus.
The CBC’s findings underscore the importance of ongoing awareness and preventative measures to combat payment fraud, especially in an increasingly digital economy.
