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Cyprus Payment Landscape: A Deep Dive Into H1 2025 Trends

Recent data from the Central Bank of Cyprus provides a clearer picture of how payment behavior is changing across the country. In the first half of 2025, small everyday purchases were mostly made with cards, while larger payments were primarily carried out through credit transfers. With an average value of €4,496, credit transfers accounted for 84% of the total transaction value, reflecting a pattern similar to the wider euro area.

Shifting Payment Preferences

An analysis of the ten most valuable categories of goods and services purchased with Cypriot cards highlights a clear divide between in-store and online spending. Payments to payment institutions represented the largest share at 14% (€912 million), followed by government-related payments at nearly 12% (€768 million) and supermarket purchases at 11% (€690 million). Transactions involving payment institutions and government services were conducted mostly online, at 100% and 89% respectively, while supermarket purchases were overwhelmingly made in person, reaching 99%.

Card Penetration And Consumer Adoption

By the end of the first half of 2025, the number of payment cards in circulation had risen by 7% compared to the same period in 2024, reaching a total of 2 million cards. This equates to roughly two cards per resident, pointing to broad adoption of digital payment methods throughout the country.

Corporate Transactions And Payment Instruments

Businesses continue to favor credit transfers, mainly because they offer stronger security, lower transaction costs, and better control over payment timing for higher-value operations. Across the euro area, the average corporate credit transfer reached €6,403 and represented 92% of total transaction value in H1 2025. Cheques, although steadily declining in use, still accounted for 6% of value with an average amount of €3,807, indicating that traditional payment tools have not disappeared entirely.

Online Versus Point‐of‐Sale Card Transactions

Across the euro area, card usage remains more common in physical stores, with 81% of transactions by volume taking place at point of sale and 19% online. In value terms, the split is 70% in-store and 30% online. Cyprus follows a similar pattern, though the average transaction size differs notably: approximately €37 at POS terminals compared with €125 online. This gap suggests that consumers are more inclined to use digital channels for higher-value purchases.

Advancements In Contactless Payments And ATM Deployment

Payment infrastructure has also seen gradual changes. The number of ATMs in Cyprus increased slightly from 397 at the end of H1 2024 to 405 by H1 2025, largely due to installations in remote and mountainous areas aimed at maintaining cash accessibility. About 72% of ATMs now support contactless transactions. Despite an overall 12% decline in ATM numbers over the past five years in both Cyprus and the broader euro area, the average withdrawal amount in Cyprus rose by 28%, climbing from €291 in H1 2022 to €372 in H1 2025.

Overall, the data points to a steady shift toward digital and credit-based payments in both Cyprus and the wider European market, while cash and traditional instruments continue to play a smaller but still visible role in everyday financial behavior.

Alpha Bank Reports Strong Underlying Q1 Performance Despite Capital Pressure

Robust Operational Performance

Alpha Bank’s first quarter 2026 report demonstrates a solid operational foundation, as confirmed by analyses from leading institutions such as Citi, JPMorgan, Jefferies, and Deutsche Bank. Despite an accounting impact from extraordinary one-off costs, the bank’s commercial momentum remains unmistakable, driven notably by fee income and resilient net interest margins.

Capital Position And Extraordinary Items

Quarterly results were weighed down by a lower-than-expected capital ratio and a €47 million expense linked to a voluntary exit program affecting around 350 employees. As a result, net profit totaled €182 million, falling 9% below market consensus. At the same time, the restructuring initiative is expected to generate annual savings of approximately €15 million.

Operating Metrics And Investor Insights

Analysts highlighted the strength of Alpha Bank’s underlying operations after adjusting for extraordinary items. Adjusted net profit reached €221 million, exceeding market expectations by 2%. Fee income increased 29% year-on-year to €140 million, supported by higher revenue from business lending fees, insurance services, investment banking and wealth management activities. Performing exposures and assets under management also reached record levels during the quarter, reinforcing the bank’s efforts to diversify revenue streams beyond interest income.

Market Valuation And Sector Commentary

Market commentary following the results remained broadly positive despite pressure on some balance-sheet metrics. JPMorgan described the quarter as showing underlying strength, while Deutsche Bank and Jefferies maintained buy recommendations with target prices reaching €4.85. At the same time, analysts continued to monitor pressure on net interest margins and dilution in common equity tier 1 ratios as banks adapt to changing market conditions.

Strategic Outlook

Alpha Bank is expected to provide additional details on its medium-term strategy during its investor day scheduled for the second half of 2026. Key areas of focus are expected to include the sustainability of fee income growth, capital trajectory management and shareholder returns. The bank has also maintained its earnings per share target of €0.40 for 2026, representing projected year-on-year growth of 11%.

First-quarter results highlighted Alpha Bank’s ability to maintain operational momentum despite pressure from one-off costs and capital-related challenges. Growth in fee-based activities and continued expansion in assets under management also reflected the bank’s broader effort to strengthen revenue diversification across its business segments.

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