Cyprus is accelerating its shift towards digital payments, outpacing the broader euro area in card usage and instant payments as consumers and businesses increasingly move away from cash.

Non-Cash Payments Continue To Expand Across The Euro Area

Non-cash payments across the euro area continued to grow in the second half of 2025, rising 6.9% year on year to 83.5 billion transactions, according to the European Central Bank (ECB). Their total value reached €117.8 trillion, up 0.8% from the same period in 2024.

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Cards remained the dominant payment method, accounting for 57% of all non-cash transactions. Credit transfers represented 21%, followed by direct debits at 14% and electronic money payments at 6%. Cheques, money remittances and other payment services accounted for the remainder.

Cyprus Posts Stronger Growth Than The Bloc Average

Cyprus’ payments market expanded at a faster pace than the broader euro area, according to separate data from the Central Bank of Cyprus (CBC). The island recorded 174 million non-cash transactions in the second half of 2025, up 8% year on year, while their total value increased 9% to €148 billion.

“Cypriots continue to shift towards digital payment methods, with non-cash payment transactions increasing in both volume and value during the second half of 2025,” the CBC said.

Describing the payments market as “the engine of the economy”, the central bank said it is shaped by a broad range of payment instruments used by consumers and businesses. The analysis draws on data from all Cyprus-resident payment service providers, including credit institutions, payment institutions and electronic money institutions.

Cards Dominate Daily Spending

Across the euro area, card payments rose to 47.8 billion transactions, up 7.9% year on year, with a total value of €1.8 trillion, an increase of 6.9%. The average card payment remained close to €39.

Online purchases accounted for 19% of card transactions by number and 30% by value. Payments made at physical points of sale represented the remaining 81% of transactions and 70% of value.

Contactless payments also continued to gain momentum. Their number increased 11.9% to 32.9 billion, while their value rose 12.8% to €0.9 trillion. Contactless transactions accounted for 85% of in-person card payments by volume and 70% by value.

In Cyprus, cards accounted for roughly 75% of all non-cash transactions, the highest share in the euro area. The CBC attributed this to the convenience and speed of card payments, the rapid adoption of contactless technology, continued growth in e-commerce and broader merchant acceptance of electronic payments.

Online card payments in Cyprus also stood out for their relatively high average transaction values. According to the CBC, these were significantly higher than payments made at physical points of sale and ranked among the highest in the euro area, highlighting the growing importance of e-commerce in household spending.

Credit Transfers Carry The Bulk Of Value

While cards accounted for the largest share of transactions, credit transfers remained the dominant payment method by value. Across the euro area, they reached 17.8 billion transactions, up 7.1% year on year, with a total value of €108.9 trillion, an increase of 0.6%.

Their higher average value meant credit transfers accounted for 92% of the total value of all non-cash payments. Electronically initiated transfers outnumbered paper-based transfers by around 19 to one, while by value the ratio stood at 15 to one.

In Cyprus, credit transfers represented 16% of total payment volumes but 84% of the total value of non-cash payments, with an average transaction size of €4,500. This reflects their continued use for higher-value business transactions.

The CBC said credit transfers and direct debits grew faster in Cyprus than across the euro area, pointing to wider adoption by households and businesses. Growth in card payments and electronic money payments broadly matched the regional trend.

Instant Payments Gain Momentum

Electronic money payments also continued to expand across the euro area. The ECB recorded 5.1 billion transactions, up 10.7% year on year, with their combined value rising 11.7% to €0.3 trillion. Almost all electronic money payments were executed through electronic money accounts rather than stored-value cards.

The CBC also highlighted the rapid adoption of SEPA Instant Credit Transfers. In Cyprus, instant payments increased from less than 1% of all SEPA credit transfers three years ago to almost 32% by volume, while accounting for around 9% of the total value of SEPA credit transfers.

“Growth was more pronounced in Cyprus, enabling it to not only close the gap with, but also surpass the euro area average following the implementation of the Instant Payments Regulation,” the CBC said.

Cheque Use Declines But Remains Relevant In Business Transactions

Cheque usage continued to decline across the euro area, but remained more significant in Cyprus. Cheques accounted for 6% of the total value of non-cash payments on the island, with an average transaction value of €4,000. By comparison, they represented less than 1% of total payment value across the euro area, with an average value of €1,200.

According to the CBC, cheques continue to be used for business-to-business and property-related transactions, reflecting long-standing commercial practices.

Infrastructure Expands Alongside Usage

Payment infrastructure also continued to expand across the euro area. By the end of 2025, there were 872.7 million payment cards in circulation, equivalent to 2.5 cards per resident. The number of point-of-sale terminals increased 24.6% to 25.7 million, with 93% capable of accepting contactless payments.

The number of ATMs declined 1.3% to around 248,900, although 38% supported contactless transactions. In Cyprus, more than 73% of domestic ATMs enabled contactless withdrawals, placing the country well above the euro area average.

Across the euro area, 36 retail payment systems processed 60.1 billion transactions worth €27.9 trillion during the second half of 2025. Instant credit transfers accounted for 25% of all credit transfer transactions by volume but only 8% by value. The three largest retail payment systems — MCMS, STEP2-T and France’s CORE — handled 67% of transaction volumes and 63% of total value.

Meanwhile, large-value payment systems settled 75.1 million payments worth €213.8 trillion, with T2 and EURO1 remaining the two principal systems.

The Next Phase Will Test Security And Inclusion

Looking ahead, the CBC said the payments sector will continue to evolve through technological innovation, including the proposed digital euro, which the Eurosystem aims to introduce by 2029, subject to legislation expected in 2026. The European Payments Initiative and its Wero digital wallet are also expected to play an important role in strengthening Europe’s payment infrastructure.

The transition to digital payments, however, also presents new challenges. The CBC warned that older people and residents of remote areas may face barriers to accessing digital services, while payment fraud remains a growing concern.

“Ensuring that innovation is accompanied by security, financial inclusion and consumer trust will remain essential for the sustainable development of the payments ecosystem,” the CBC said.