Euro area card payments reach new highs

Cyprus outpaces euro area in shift to digital paymentsThe European Central Bank (ECB) reported this week that non-cash payments across the euro area continued to expand during the second half of 2025, while Cyprus emerged as the bloc’s leading user of card payments and recorded faster adoption of instant payments than the euro area average. The ECB said the total number of non-cash payment transactions in the euro area increased by 6.9 per cent year on year to 83.5 billion during the second half of 2025. The total value of those payments reached €117.8 trillion, representing an increase of 0.8 per cent compared with the same period of 2024. Card payments remained the most widely used payment instrument, accounting for 57 per cent of all non-cash transactions, followed by credit transfers at 21 per cent, direct debits at 14 per cent and electronic money payments at 6 per cent, while the remaining 1 per cent consisted of cheques, money remittances and other payment services. Separate figures published by the Central Bank of Cyprus (CBC) showed that Cyprus continued its own shift towards digital payments, with 174 million non-cash transactions recorded during the second half of 2025, up 8 per cent from a year earlier. The total value of non-cash payments in Cyprus increased by 9 per cent 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. The central bank described the payments market as “the engine of the economy”, explaining that it is shaped by a wide range of payment methods serving consumers and businesses. The CBC said its findings are based on information collected from all Cyprus-resident payment service providers, including credit institutions, payment institutions and electronic money institutions. Across the euro area, the ECB reported 47.8 billion card payments, an increase of 7.9 per cent, with a combined value of €1.8 trillion, up 6.9 per cent. The average value of a card transaction remained around €39. Remote transactions, including online purchases, accounted for 19 per cent of all card payments by number and 30 per cent by value, while physical point-of-sale transactions represented 81 per cent of payments and 70 per cent of their value. The number of contactless card payments rose by 11.9 per cent to 32.9 billion, while their value climbed 12.8 per cent to €0.9 trillion. Contactless transactions accounted for 85 per cent of all in-person card payments by volume and 70 per cent by value. At national level, Cyprus recorded the highest share of card payments in the euro area, with cards accounting for around 75 per cent of all non-cash transactions. The CBC said this reflected the convenience and speed of card payments, widespread contactless adoption, continued growth in e-commerce and broader acceptance of electronic payments by merchants. The report also highlighted the growing importance of online shopping. “Online card payments in Cyprus were associated with significantly higher average transaction values than card payments at physical points of sale,” the CBC said. It added that the average value of online card payments ranked among the highest in the euro area, underlining the growing role of e-commerce in household spending. Although cards dominated transaction numbers, credit transfers remained by far the largest payment method by value. The ECB reported 17.8 billion credit transfers across the euro area, an increase of 7.1 per cent, with a combined value of €108.9 trillion, up 0.6 per cent. Because of their higher average value, credit transfers accounted for 92 per cent of the total value of all euro area non-cash payments. Electronically initiated credit transfers outnumbered paper-based transfers by around 19 to one, while the ratio by value stood at 15 to one. Latvia recorded the highest share of credit transfers among all non-cash transactions, at around 36 per cent. In Cyprus, credit transfers represented 16 per cent of total payment volumes but 84 per cent of the total value of non-cash payments, with an average transaction value of €4,500, reflecting their continued use for higher-value business payments. The ECB said 11.7 billion direct debits were processed across the euro area, an increase of 1.8 per cent, while their value rose 3.4 per cent to €5.6 trillion. Germany continued to record the highest share of direct debits among all non-cash payments, at around 31 per cent. Electronic money payments also continued growing. The ECB reported 5.1 billion electronic money transactions, up 10.7 per cent, with a total value of €0.3 trillion, an increase of 11.7 per cent. Almost all electronic money payments were made using electronic money accounts rather than stored-value cards. The CBC said credit transfers and direct debits grew faster in Cyprus than across the euro area, indicating wider adoption by households and businesses. Growth in card payments and electronic money payments broadly matched euro area trends. Although cheque usage continued to decline, cheques remained the second most important payment instrument in Cyprus by value. “Despite their continued decline, cheques remained the second most important payment instrument in value terms,” the CBC said. Cheques accounted for 6 per cent of the total value of non-cash payments in Cyprus, with an average transaction value of €4,000, compared with less than 1 per cent of total payment value in the euro area and an average cheque value of €1,200. The central bank said cheques continue to be used in business-to-business and property transactions, reflecting long-established commercial practices. Domestic payments accounted for around 70 per cent of both the volume and value of non-cash payments in Cyprus. Cross-border activity was particularly significant for card payments, representing 45 per cent of total card payment volumes and 56 per cent of their value. The CBC said Lithuania recorded the highest level of cross-border card activity based on payment service provider location, while Ireland ranked first when measured by merchant location because of its concentration of fintech and payment companies. The ECB also reported continued growth in payment infrastructure. At the end of 2025, there were 872.7 million payment cards in circulation across the euro area, an increase of 7.3 per cent, equivalent to 2.5 payment cards for every euro area resident. The number of point-of-sale terminals increased by 24.6 per cent to 25.7 million, with 93 per cent capable of accepting contactless payments. The number of ATMs fell by 1.3 per cent to around 248,900, although 38 per cent supported contactless transactions. The CBC said Cyprus remained one of Europe’s leaders in contactless infrastructure, with more than 73 per cent of domestic ATMs supporting contactless withdrawals, well above the euro area average. The ECB said 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 per cent of all credit transfer transactions by volume but only 8 per cent by value. The three largest retail systems, MCMS, STEP2-T and France’s CORE, processed 67 per cent of transaction volumes and 63 per cent of transaction values. Meanwhile, euro area large-value payment systems settled 75.1 million payments worth €213.8 trillion, with T2 and EURO1 remaining the principal systems. The CBC also highlighted the rapid growth of SEPA Instant Credit Transfers, with Cyprus increasing from less than 1 per cent of SEPA credit transfers three years earlier to almost 32 per cent by volume, while instant payments represented around 9 per cent of total SEPA credit transfer values. “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. Looking ahead, the CBC said the payments sector is expected to continue evolving through technological innovation, including the proposed digital euro, which the Eurosystem aims to introduce by 2029, subject to legislation expected in 2026. The central bank also highlighted the European Payments Initiative and its Wero digital wallet as important projects designed to strengthen Europe’s own payment infrastructure. Despite the rapid expansion of digital payments, the CBC warned that older people and those living in remote areas could face difficulties accessing digital services, while payment fraud remains an increasing 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.