Fraudsters target high-value credit transfers in Cyprus as losses double

Fraudulent payment transactions in Cyprus surged by 30 per cent in volume and 66 per cent in value in the first half of 2025, although they remain below euro area averages in relative terms, according to a report from the Central Bank of Cyprus (CBC).

The central bank said total fraudulent payment transactions rose to approximately 16,000 cases in the first six months of 2025, compared with the same period in 2024, while their total value climbed to almost €4 million.

This marked a faster increase than in the euro area overall, where the total number of fraudulent transactions remained broadly stable at around 9 million between the end of the first half of 2024 and the end of the first half of 2025, and the total value rose modestly by 6 per cent to €1.7 billion.

The CBC stressed that fraud levels remain acceptable in both absolute and relative terms in Cyprus, meaning fraud as a share of total payments is still lower than the corresponding euro averages for each payment service.

However, it highlighted that the overall upward trend has been driven primarily by a surge in fraudulent card payments over recent years.

Card fraud accounted for 92 per cent of all fraudulent transactions by volume in Cyprus during the first half of 2025, reaching around 15,000 cases.

The remaining payment services together accounted for approximately 1,000 fraudulent transactions, while no fraud was reported in cheques.

In the euro area, fraudulent card payments represented 81 per cent of the total number of fraudulent transactions, meaning the share in Cyprus was higher, partly reflecting higher card usage domestically.

In volume terms, fraudulent card payments in Cyprus increased by 30 per cent compared with the first half of 2024, while the equivalent figure for the euro area remained relatively stable.

The highest fraud rate in volume terms in Cyprus was recorded in electronic money payments at 0.016 per cent of total e-money transactions, followed by card payments at 0.013 per cent.

The fraud rate in e-money payments rose from 0.011 per cent to 0.016 per cent year-on-year, while card payment fraud increased from 0.011 per cent to 0.013 per cent.

The corresponding euro area fraud rate stood at 0.014 per cent for e-money and 0.016 per cent for card payments, both slightly above or close to Cyprus levels.

The CBC explained that types of fraud vary by payment method, with manipulation of the payer accounting for 59 per cent of fraudulent credit transfers, meaning account holders are tricked into sending money to scammers.

The remaining 41 per cent of fraudulent credit transfers stemmed from unauthorised payment transactions such as the use of stolen personal credentials.

For card payments and e-money payments, unauthorised transactions dominated, accounting for 97 per cent and 100 per cent respectively of fraudulent cases in Cyprus.

Credit cards were more frequently affected by fraud than debit cards, with a fraud share of 0.017 per cent for credit cards compared with 0.012 per cent for debit cards in the first half of 2025.

The CBC attributed this to higher spending limits on credit cards, making them more attractive targets for fraudsters.

In value terms, fraudulent credit transfers and card fraud accounted for the overwhelming majority of losses.

Furthermore, fraudulent credit transfers totalled €1.9 million, representing 54 per cent of the total value of fraud, while card fraud amounted to €1.6 million, representing 45 per cent.

The value of fraud across all other payment services was less than €50,000.

In the euro area, fraudulent credit transfers represented 61 per cent of total fraud value, followed by card payments at 31 per cent.

The CBC also reported that the value of fraudulent credit transfers in Cyprus doubled compared with the first half of 2024, while in the euro area it increased by 19 per cent.

Card fraud value in Cyprus rose by 40 per cent year-on-year, while in the euro area it declined by 8 per cent.

The highest fraud rate in value terms in Cyprus was recorded in card payments at 0.021 per cent of total card payments, up from 0.017 per cent a year earlier, compared with 0.030 per cent in the euro area.

In addition, the average value of fraudulent credit transfers in Cyprus reached €5,472, exceeding the average value of a credit transfer in general at €4,496.

This figure was more than double the euro area average of €2,102, making it one of the highest in the bloc.

“This can be attributed to the fact that fraudsters are targeting high value transactions,” the CBC stated.

By contrast, the average value of a fraudulent card payment stood at €106, compared with an average card payment value of €65.

The central bank also said that the additional safety measure Verification of Payee became mandatory across the euro area on October 9, 2025, and said this is expected to help contain fraud in electronic credit transfers.

The data also revealed that cross-border fraudulent payments were significantly higher than domestic fraudulent payments across all services.

Card fraud was about 24 times more likely to occur in cross-border transactions than in domestic transactions in Cyprus.

The CBC attributed this to differing regulatory frameworks across jurisdictions and insufficient cross-border cooperation among payment service providers and other stakeholders.

Meanwhile, strong customer authentication requirements were shown to have a clear impact on reducing fraud.

For the first half of 2025, the fraud rate for card payments authenticated via SCA stood at 0.006 per cent in volume terms, compared with 0.018 per cent for payments not authenticated via SCA.

In value terms, the respective fraud rates were 0.011 per cent and 0.037 per cent.

The central bank pointed out that SCA may not be requested where the counterpart is located outside the European Economic Area.

Although 70 per cent of card payments by volume were made at a physical point of sale and 30 per cent online, almost all fraud occurred online, the report showed.

Fraudulent card payments were 97 per cent online in volume terms and 96 per cent in value terms, compared with just 3 per cent and 4 per cent respectively at physical points of sale.

Online transactions are considered riskier because they involve card-not-present payments, making them more vulnerable to hacking and theft.

“The upward fraud trend shows no signs of abating, while methods are becoming increasingly sophisticated,” the CBC said.

“Fraudulent payments in Cyprus resumed the strong upward trend, while they still remain at acceptable levels in both absolute and relative terms for each payment service compared to the corresponding euro averages,” the central bank added.

“Cyprus recorded one of the largest average values of fraudulent credit transfers in the euro area for the first half of 2025,” the CBC stated.

“The implementation of VoP is expected to have a significant positive impact on reducing fraud in relation to credit transfers in the coming months,” report continued.

The CBC further stated that card payment fraud is significantly higher for cross-border online transactions, particularly not authenticated via SCA.

“Fraud can take many forms, and spotting the warning signs is key to prevention,” the central bank said.

“Human error often remains the weakest link,” the CBC added. “In today’s intricate financial landscape, collaboration is vital in the battle against fraud.”

“PSPs must understand the emerging threats and keep investing in appropriate security and monitoring technologies, while the Cyprus Financial Literacy and Education Committee and society in general empower citizens with the necessary knowledge and skills,” the central bank concluded.