Fraudulent credit transfers have doubled in Cyprus, highlighting a concerning trend in financial crime as losses surge. A recent report by the Central Bank of Cyprus (CBC) reveals that the first half of 2025 saw a striking 30 per cent increase in the volume of fraudulent payment transactions, alongside a staggering 66 per cent rise in their value.
In total, the number of fraudulent transactions reached approximately 16,000 cases, with nearly €4 million lost. While these figures indicate a serious issue, the CBC noted that Cyprus’s fraud levels remain below the euro area averages, both in absolute numbers and relative terms.
Fraudulent credit: Shift Towards Card Payments
The CBC’s findings underline a significant shift towards card fraud, which accounted for 92 per cent of all fraudulent transactions in volume terms. This trend has been driven by a growing reliance on card payments, with around 15,000 cases reported in the first half of 2025 alone. In comparison, other payment methods reported just about 1,000 fraudulent transactions, while cheques saw no fraud cases at all.
In the euro area, card fraud represented 81 per cent of total fraudulent transactions, highlighting that Cyprus is experiencing a higher incidence of card-related fraud, likely due to its increased domestic usage.
Fraud Rates and Analysis
The CBC revealed that the fraud rate for electronic money payments stood at 0.016 per cent, while card payments saw a slightly lower rate of 0.013 per cent. Although these rates have increased from the previous year, they remain comparable to euro area levels.
A concerning statistic is that 59 per cent of fraudulent credit transfers involve manipulation of the payer, where individuals are deceived into sending money to scammers. The remaining 41 per cent are due to unauthorised transactions, such as the use of stolen credentials.
Impact of Credit Transfers and Card Fraud
Financial losses from fraudulent credit transfers reached €1.9 million, making up 54 per cent of total fraud value, while card fraud accounted for €1.6 million, or 45 per cent. The average value of a fraudulent credit transfer in Cyprus reached €5,472, significantly higher than the average credit transfer value of €4,496. This average is also more than double the euro area average of €2,102, as fraudsters increasingly target high-value transactions.
Electronic Transactions and Security Measures
The CBC has highlighted that strong customer authentication (SCA) requirements are crucial in reducing fraud. For the first half of 2025, the fraud rate for card payments authenticated via SCA was 0.006 per cent, compared to 0.018 per cent for those not authenticated. Nonetheless, online transactions pose a greater risk, with 97 per cent of fraudulent card payments occurring online.
The Challenge of Cross-Border Transactions
Cross-border fraudulent payments present a significant challenge, with card fraud occurring approximately 24 times more frequently in these transactions than in domestic ones. The CBC attributes this to varying regulatory frameworks between jurisdictions and a lack of cooperation among payment service providers.
Looking Ahead
As the CBC prepares for the mandatory implementation of the Verification of Payee (VoP) across the euro area starting 9 October 2025, it is hopeful that this will help mitigate fraud in electronic credit transfers. The central bank emphasises the need for vigilance against increasingly sophisticated fraud methods, asserting that collaboration among stakeholders is vital in combating this issue.
“Fraud can take many forms, and spotting the warning signs is key to prevention,” the CBC remarked, underlining the importance of financial literacy and education in empowering citizens against fraud. As such, the need for continuous investment in security technologies by payment service providers has never been more critical.
