As Cyprus, and the world, embraces digital payments, the latest report from the Central Bank of Cyprus (CBC) serves as a sobering reminder: with innovation comes vulnerability.

The CBC’s recent publication on fraudulent non-cash transactions reveals a steep rise in both the volume and value of payment fraud in Cyprus during the second half of 2024. While digital payment systems bring undeniable benefits to consumers and businesses, they also expose new entry points for fraud, particularly as adoption accelerates.

According to the data, fraudulent transactions rose by 34 per cent in number and 26 per cent in value compared to the same period in 2023. In real terms, this translates to nearly 14,000 fraudulent incidents, with a total value approaching €3 million.

Although Cyprus still reports relatively low absolute fraud levels compared to the euro area, the rate of increase is far more alarming, a trend that deserves both caution and proactive response.

Card payments dominate, cross-border fraud the true threat

Card transactions are at the heart of this uptick: 94 per cent of all reported fraud involved debit or credit cards. In terms of volume, card fraud grew by 41 per cent, while its value rose by 27 per cent. The average fraudulent card transaction amounted to €93, while credit transfers, fewer in number but greater in impact, saw an average loss of €8,015 per case.

However, the most concerning pattern is the prevalence of cross-border fraud. According to the CBC, card transactions processed outside Cyprus were 25 times more likely to be fraudulent than domestic ones. This gap points to fragmentation in regulatory enforcement and insufficient cross-border cooperation between payment service providers (PSPs).

Moneygate on the frontlines: security must scale with innovation

Panayiotis Theodosiou, Chief Operations Officer at Moneygate, offers a broader perspective. “The rise in fraud reflects wider trends across the EU,” he says. “The digital transformation of payments has simplified everyday life, but it’s also introduced new vulnerabilities. The real challenge isn’t just technological. It’s about finding the right balance between ease-of-use and system resilience.”

At Moneygate, this philosophy translates into strict security protocols, adherence to EU directives and best practices across all transactions. The company invests heavily in infrastructure that’s both compliant and flexible, integrating tools that build client trust while enabling fast, seamless payments.

“Fraud has operational implications far beyond the immediate financial loss: it affects customer service, incident response, regulatory obligations and even brand perception,” continues COO Theodosiou. “That’s why we’ve developed a proactive framework that includes real-time monitoring powered by AI, which flags suspicious behavior before it escalates. Much of our incident resolution process is automated, allowing our team to focus on high-level risk analysis and fraud prevention.”

Fraud prevention: not just a tech challenge, but a culture shift

The CBC report highlights the same point: fraud is not just a tech challenge, it’s a matter of shared responsibility, user education, and collaborative culture across the ecosystem.

As Theodosiou notes, a strong fraud prevention strategy must go beyond firewalls, monitoring and algorithms. It’s about building a cooperative system that supports early detection, rapid information sharing and aligned regulatory approaches across borders.

Ultimately, safeguarding digital payments is not just about reacting to threats. It’s about building an infrastructure of trust, transparency and teamwork, where innovation is supported by robust, adaptable systems and where financial institutions, regulators and consumers work in sync.