“The prices charged for payment services should reflect the cost of producing the services, to a greater extent than is the case at present. This would secure a more cost-effective use of resources. Deficits on payment services have to be paid for from the other activities of the banks,” he continues.

Most bills are still sent out on paper. Savings can be achieved by increasing the number of electronic invoices used. Payment recipients can stimulate this process by imposing a charge or offering a discount, depending on the costs associated with a customer’s choice of payment instrument. Recently-enacted legislation extends the scope of stores and other payment recipients for imposing charges or offering discounts, depending on the costs they incur on card payments. This can help to create a more cost-efficient payment system.

Cross-border payments are more costly and take longer than payments within a country. Recent legislation imposes a maximum limit on the time within which banks and payment enterprises are required to process payment between EEA member states. From 2012 onwards, all payments of this nature will have to be completed within 24 hours.

“The interbank systems for the clearing and settlement of money transfers make up the central core of the payment system. The design of these clearing and settlement processes must be such that financial stability is safeguarded. These systems remained robust during and in the wake of the financial crisis. Markets without a sound infrastructure are more vulnerable to disruption. Improved infrastructure will therefore need to be established on a number of markets internationally,” concludes Svein Gjedrem.