Digital banking reshapes Cyprus despite pressure for more ATMs

The Central Bank of Cyprus (CBC) has reported only a marginal increase in the number of Automatic Teller Machines (ATMs) across the island, underscoring the steady shift towards digital payments despite political pressure for better access to cash in rural areas.

According to the CBC’s latest analysis of payment trends and infrastructure, there were 398 ATMs operating in Cyprus by December 2024, compared with 397 in June 2024, 398 in December 2023, 401 in mid-2023, 392 at the end of 2022, and 416 in June 2022.

The figures show that while the network has remained broadly stable, the total number of machines has actually declined over the two-year period.

The findings come amid ongoing concern in Parliament about limited ATM access in remote communities, particularly for elderly residents who rely on cash.

Lawmakers have repeatedly raised the issue after reports that some villagers were travelling long distances to withdraw money.

In response to political pressure last year, banks agreed to install up to ten additional ATMs in rural areas to close service gaps for older individuals.

However, the CBC data suggest that the expansion has been minimal, with the total number of machines largely unchanged since 2023.

While access to cash remains a social issue, the CBC’s data reveal a continuing transformation in how Cypriots conduct transactions, with rapid growth in card payments and electronic methods.

The number of payment cards in circulation surpassed two million for the first time, reaching 2,031,569 by December 2024, up from 1,718,939 two years earlier.

This represents an increase of over 18 per cent, reflecting widespread adoption of digital payment tools.

Between 2022 and 2024, card payments accounted for 72 to 73 per cent of all non-cash transactions by volume, confirming their dominant role in everyday financial activity.

Credit transfers followed, maintaining a steady share of around 15 to 16 per cent.

Direct debits, meanwhile, declined from 6 per cent to 4 per cent, and both cheques and electronic money payments accounted for just 1 per cent or less of transaction volume.

When looking at the value of non-cash payments, the pattern was reversed.

Credit transfers represented the largest share, rising from 81 per cent of total value in 2022 to 83 per cent in 2024, while card payments made up only about 10 to 11 per cent.

Direct debits fell slightly from 4 per cent to 3 per cent, and cheques maintained a 4 per cent share of total payment value.

In a separate section of its quarterly bulletin, the CBC reported that card usage has become the main driver of non-cash transactions, with 83 per cent of the value of such payments in 2024 made using payment cards, compared with 81 per cent in 2022.

Payments through electronic money accounted for 2 per cent, and cheques represented 7 per cent, down from 9 per cent two years earlier.

The shift to digital transactions reflects broader changes in consumer habits.

The CBC reported that 71 per cent of card payments were made through physical terminals, while 29 per cent were conducted online.

However, in terms of value, online transactions were higher, representing 57 per cent of the total, compared with 43 per cent for payments made in person.

The CBC’s data also highlight the wider financial context. Deposits represented 194 per cent of Cyprus’s GDP at the end of December 2024, while loans stood at 88 per cent, indicating that despite high levels of borrowing, household and corporate savings remain substantial.

A year earlier, deposits were equivalent to 198 per cent of GDP, and loans reached 94 per cent.

The European Central Bank (ECB) recently reported that the digital euro could help overcome fragmentation in retail payment systems across the euro area, suggesting a further shift in payment behaviour when it is introduced, potentially around 2029.

“The digital euro is being designed to ensure payments remain possible under all circumstances, with inclusion as its guiding principle,” the ECB stated.

“From accessible design features to local support, we are working to ensure that everyone, regardless of income, digital skills or accessibility needs, can benefit from secure and easy-to-use digital payments,” it added.