Payment fraud in Cyprus is on the rise, but the latest
data suggest the country still records lower levels of fraud than the euro area
average. The Central Bank of Cyprus released its first statistical report on
payment fraud covering the second half of 2024, highlighting how criminals
exploit different types of non-cash transactions.
Card Fraud Dominates by Volume
According to the report, card fraud made up 94% of all
fraudulent transactions by volume. However, when measured by value, the largest
losses came from credit transfers, which accounted for 60% of fraudulent
activity. Card payments followed with 39% of the total fraud value.
The findings highlight a clear difference in fraud
patterns: while cards are most frequently misused, high-value fraud tends to
involve tricking account holders into transferring money directly to
fraudsters.
The Central Bank’s analysis shows that 75% of
fraudulent credit transfers involved scams where victims were manipulated into
making payments. In contrast, 99% of card fraud cases stemmed from criminals
using stolen or unauthorized customer information.
The report also found that fraud linked to card use
was almost entirely concentrated in online transactions, despite most
legitimate card payments still taking place at physical points of sale.
Cross-Border Transactions Carry Higher Risk
Fraudulent activity was far more common in
cross-border transactions compared with domestic payments. For card
transactions, the risk of fraud occurring outside Cyprus was about 25 times
higher. This stark difference underscores the challenges
regulators and payment providers face in securing international transactions.
The Central Bank said the implementation of strong customer authentication rules has helped reduce the risk of card fraud. The
measures appear to have strengthened the resilience of the payment system, even
as fraud attempts continue to rise.
The Central Bank of Cyprus emphasized that monitoring
and publishing payment fraud data plays a key role in improving transparency
and guiding further regulatory action. The new statistical releases will serve
as a benchmark for assessing trends in future reporting periods.
This article was written by Jared Kirui at www.financemagnates.com.
