How are payments made?
There are primarily two types of money in the payment system, notes and coins issued by Norges Bank (cash) and deposits in banks (deposit money).
When a payment is settled with notes and coins, the money is transferred immediately between payer and payee on the spot.
When settling with deposit money, different payment instruments such as payment cards, apps and online banking may be used. The payment is then transferred from the payer's account to the payee’s account through an elaborate electronic payment system. Final settlement between the payer and payee’s banks takes place at the central bank.
Whether you use cash or deposit money, the payment system will ensure that the payment is executed swiftly and securely. Norges Bank is the core of this system.
Payment cards are used most frequently
In recent years, the use of payment cards in Norway has increased sharply. On average, each Norwegian makes over 400 card payments a year. Measured as the number of transactions, payment cards are therefore currently the most important payment instrument in Norway.
Most money is transferred by bank transfer
Even though payment cards are used most frequently, more money is transferred by bank transfers. A typical bank transfer using online or mobile banking is substantially greater than a typical card payment. In monetary value, online banking is the main payment instrument.
Cash accounts for a declining share of the money supply
The average value of cash in circulation has fallen slightly over the past three years, and now stands at around NOK 45bn. At the same time, the quantity of deposit money is increasing. Overall, this results in cash accounting for a declining share of the total money supply. Are we headed towards a cashless society? Cash will continue to be in use in the foreseeable future, but the extent of their daily use is essentially up to you.