Central bank warns of growing cyber fraud

Cyprus has recorded a significant rise in payment fraud, with incidents and financial losses growing faster than anywhere else in the eurozone, a Central Bank of Cyprus report showed on Monday.

The report showed that in the second half of 2025, nearly 14,000 fraudulent transactions were reported, a 34 per cent increase over the same period last year.

The total financial impact of these incidents accounted for €3 million in losses, up 26 per cent year-on-year.

By contrast, the eurozone experienced only a 7 per cent rise in volume and a 22 per cent increase in losses, highlighting the unusually rapid escalation of fraud on the island.

Card payments remain the primary target of fraudsters, accounting for 94 per cent of all incidents.

Almost all of these cases occurred online, reflecting the growing vulnerability of e-commerce transactions.

In-store card use, by contrast, remained largely secure.

Despite the high number of card-related cases, credit transfers proved more financially damaging, responsible for 60 per cent of the total losses, a total of €1.8 million, largely due to Authorised Push Payment (APP) scams.

APP is a type of fraud where a victim is tricked into willingly sending money to a scammer.

Card transactions outside Cyprus were found to be 25 times more likely to be fraudulent than domestic ones, while international credit transfers carried a tenfold higher risk.

The central bank warned that differences in legal frameworks and limited cross-border cooperation create gaps that fraudsters exploit, making prevention and enforcement more difficult.

The report also highlighted the “Achilles’ heel” of Cyprus’ payment ecosystem, the rapid rise of e-commerce and cross-border transactions, where traditional security measures are often insufficient.

The report called for immediate measures to strengthen consumer protection, tighten supervision of payment providers, and accelerate adoption of advanced security protocols for both domestic and international transactions.

The central bank emphasised that the island must act swiftly to safeguard both consumers and the integrity of its financial system, particularly as digital commerce continues to expand.

The bank warned that stricter regulatory oversight, and robust security measures are now essential to prevent Cyprus from becoming an increasingly attractive target for cybercriminals.