Subscribe
The way Cypriots make financial transactions appears to be changing increasingly, as a large proportion of these transactions are now carried out using bank cards.
Cypriots seem to prefer “plastic” money and contactless payments, while such payment methods also allow the state to monitor the flow of money and combat tax evasion.
The figures presented indicate that the way payments are made and money flows in Cyprus has changed significantly, with residents of the island displaying very different transaction habits compared with previous years.
Trust in bank cards and the convenience they offer have encouraged Cypriots to prefer this method for the majority of their payments.
According to data presented by the Central Bank of Cyprus in its recent report on payment statistics, card payments were the most frequently used payment method (excluding cash) in Cyprus, accounting for 75% of the total volume of transactions.
It is worth noting that Cyprus maintains the highest proportion of card payments among the euro-area countries.
Credit transfers ranked second in terms of transactions in Cyprus, accounting for just 16%. This was significantly lower than the share of payments made by bank card.
Another important point is that online card payments in Cyprus had a higher average transaction value (€129) compared with in-store, face-to-face card payments (€38).
As regards higher-value payments, credit transfers retained their strong position among payment methods in Cyprus, accounting for 84% of total transactions (excluding cash).
As stated in the Central Bank of Cyprus report, the average use of instant credit transfers recorded a significant increase in Cyprus, as well as in the other euro-area countries, over the past three years.
Another important finding of the report is that payments made by bank card recorded the highest level of cross-border transaction activity.
Specifically, cross-border transaction activity accounted for 45% of the total volume and 56% of the total value of card transactions.
According to the published data, payments to payment institutions were also the category with the highest transaction value, accounting for 14% of the total value of bank card payments. Government service payments ranked second, at 11%, followed by purchases from retail stores, at 10%.
It is worth noting, however, that both the number of bank branches and the number of cash withdrawal points (ATMs), both in Cyprus and across the euro area, have declined significantly over the past five years, by approximately 13%. This also demonstrates the gradual decline in the use of cash for everyday transactions.
No one could have foreseen a few decades ago the potential of electronic money as it is manifested today. Nowadays, cash is a payment method that is no longer widely preferred by citizens. Gradually, this proportion of citizens is expected to continue to increase.
The “intangible” flow of money through online channels and the contactless payment methods chosen by consumers in Cyprus, reducing the use of cash, appear to have firmly become part of everyday life.
This is something that can be easily observed in the data published by the Central Bank of Cyprus. It may, perhaps, represent a gradual transition from cash to the digital form of money, which greatly facilitates citizens’ transactions.
The way transactions are conducted has changed, and, as everything indicates, it will continue to evolve on a new basis.
Nowadays, cross-border transactions and payments in general are carried out digitally, without the physical presence of individuals. We are truly experiencing a new economic revolution, where everything can be done almost instantly and in a very short amount of time.
If we may venture a prediction, electronic and contactless transactions, as well as the use of bank cards, will continue to increase, gradually bringing about major changes in the way we have understood money up to now.