Norges Bank

Press release

Report on payment systems 2001 : Lower prices and increased use of electronic payment services

From 2000 to 2001 the number of payments made by PC/Internet doubled, and in 2001 almost as many credit transfer (giro) payments were made by this means as were made by mail. The use of payment cards has increased by about 20 per cent annually since 1996, and cards are the most widely used payment instrument in Norway. Electronic payment instruments like cards and giros paid via PC/Internet are generally more cost-effective than paper-based instruments. Increased use of electronic payment instruments therefore reduces the overall costs associated with the payment system.

Unchanged prices for electronic services, marked price increase for paper-based services
There was no rise in prices for electronic payment services for private customers from January 2001 to January 2002. The price of using cards in payment terminals (EFTPOS) fell by 7 per cent during the period. Prices for electronic services for the business sector remained largely unchanged or fell slightly from January 2001 to January 2002.

There was a marked increase in prices for paper-based giro services for private customers from January 2001 to January 2002, particularly for giro services at the counter. Prices for cash payment by giro and giros charged to an account at the counter increased by about 35 per cent. The price rise for mail giros was moderate. Part of the price increases for paper-based services are probably due to increased differences in the production costs of electronic and paper-based payment services. The increases may also reflect banks' wish to encourage customers to use different, less costly payment instruments. Because the public’s payment habits have changed substantially during the last decade, the average price of executing a non-cash payment (mainly card and giro payments) measured in constant 1994 prices at end-2001 was almost a krone less than in 1994. In the same period, the cost of the average giro payment had fallen by 15 øre, measured in constant prices. There was an increase of 35 øre in the nominal giro price from 2001 to 2002 due to the sharp rise in prices for giros at the counter.

Norges Bank is now conducting a survey of the costs to banks of producing various types of payment service. The results of this survey will be published in the second half of 2002.

Number of giros paid over the Internet doubled from 2000 to 2001
The number of internet banking agreements rose by almost 50 per cent, to 1.35 million at end-2001. The number of giros paid by means of net banks has doubled for two successive years, and 66 million giros were paid by this means in 2001. At the same time, the number of giros submitted by mail dropped by 18 per cent from 2000 to 2001, with the result that 1.1 giros were paid by mail for every giro paid over the Internet in 2001. There was no change in the number of giros paid by phone, and a slight increase in the number of agreement-based giros (direct debits). There was only a slight reduction in the number of giros presented at the counter from 2000 to 2001. In 2002, paying giros via PC/Internet will probably become the giro method most widely used by private persons.

Continued rise in the use of payment cards
The number of payments made by card increased by 16 per cent from 2000 to 2001, to 446 million transactions, and card payments account for over half of all non-cash payments in Norway. The average value of purchases of goods and services by means of a bank card was NOK 350 in 2000, a reduction of about NOK 30 on the previous year.

Cash withdrawals
The number of cash withdrawals in connection with purchases (cash-back) rose by 25 per cent from 2000 to 2001, and is now the most widely used means of withdrawal in Norway. In 2001 cash was withdrawn with every third bank card payment. The amounts withdrawn were stable at an average of NOK 360, so the overall value of these withdrawals is limited. The number of ATM withdrawals rose slightly, while the average amount withdrawn rose to NOK 1 140. The number of withdrawals at the counter dropped by 12 per cent, and in terms of value, overall ATM withdrawals now amount to more than at-counter withdrawals, even though the average at-counter withdrawal is about NOK 4 260.

The public’s holdings of notes and coins
In the past two years there has been a slight reduction in cash held by the public from NOK 43.9 billion in 1999 to NOK 42.9 billion in 2001. This represents a break with the steady increase in cash holdings that has pertained for the past 20 years.

The Report on Payment Systems is available in Norwegian on our website. The printed version can also be ordered from Norges Bank.


Press telephone: +47 21 49 09 30

Published 29 April 2002 10:00