An efficient payment system
In 2006, Norwegians used their payment cards more than 200 times each and made over 30 payments through Internet banks. “The use of payment cards and Internet banking is rising sharply. This confirms that Norwegian bank customers have access to a highly efficient payment system”, says Governor Svein Gjedrem in connection with the presentation of Norges Bank’s Annual Report on Payment Systems for 2006. This report is the twentieth in a series of reports.
Increasing number of payments using cards and Internet banking
At end-2006, there were more than 9 million payment cards in Norway. This is 17 per cent more than in 2005. The increase is considerably higher than in previous years. The number of card payments rose by 14 per cent, with an average 185 payments per inhabitant. Including cash withdrawals from ATMs, the number of transactions amounted to more than 200 per inhabitant. Norway is one of the countries in the world where cards are most widely used. Iceland is the only country where cards are used more extensively than in Norway.
In 2006, purchases using Norwegian payment cards amounted to NOK 352 billion. More than NOK 60 billion was paid by credit cards. The increase in the use of credit cards is higher than the increase in the use of debit cards.
Last year, retail customers transferred NOK 585 billion using Internet banking services. This is three times the amount transferred five years ago. A total of 144 million transactions were made. Retail customers paid 82 per cent of their bills electronically. Electronic services offered by banks are considerably less expensive than paper-based services. This contributes to the increase in the use of electronic services.
Cash holdings remain stable
The value of banknotes and coins in circulation has increased in recent years. In 2006, the value of cash in circulation amounted to NOK 49 billion. This is 7 per cent more than in 2005. As a share of household consumption, the cash share remains virtually unchanged. Liquid assets in the form of deposits in bank accounts are increasing far more than cash holdings. This means that cash as a share of the total means of payment is diminishing.
Secure and efficient interbank systems
The systems for clearing and settlement of interbank payment transactions constitute the core of the payment system. They should be designed with a view to promoting financial stability. Norges Bank oversees the interbank systems. A review of three of the most important systems shows that they are of high quality and that they satisfy international recommendations, with only minor exceptions.
The report is available in Norwegian and a printed copy can be ordered from Norges Bank.
The English version will be available on our website by the end of May 2007.
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