Users of the Norwegian payment system have access to efficient payment services. Prices that reflect the cost of producing these services have given users an incentive to switch from paper-based to electronic solutions. This has contributed to more efficient resource utilisation in this sector, said Governor Svein Gjedrem at a press conference to launch the Norwegian version of the report, held at Norges Bank on Wednesday, 27 April.

The use of payment cards in Norway has more than doubled in the past five years. Approximately 676 million payments for goods and services were made using cards in 2004, an increase of 14 per cent on the previous year. Most card transactions involve the BankAxept card, which is linked to the card-holder's bank account. The use of credit cards and international payment cards is increasing rapidly, but these cards are not as widely used in Norway as in some other countries.

Approximately 259 million cash withdrawals were recorded in 2004. Cash withdrawals in connection with goods purchases now account for over half of all cash withdrawals. The number of ATM withdrawals has shown a slight decline in recent years. There are over 97 000 point-of-sale terminals and approximately 2 200 ATMs in Norway. Over-the-counter cash withdrawals now account for only 6 per cent of all withdrawals.

The value of banknotes and coins in circulation as a share of the total means of payment available to the public declined slightly in 2004. Norwegian banknotes have a number of security features and due to the introduction of new features in recent years, the number of counterfeit banknotes is declining.

Banks' list prices for payment services increased from 2004 to 2005. Price increases have been sharpest for some paper-based services. Although some types of cross-border payment transactions have fallen in price, prices for these services far exceed prices for domestic payments. Cross-border payments often involve costly, labour-intensive manual processing. This is expensive and time-consuming. Increasing the efficiency of this type of payment poses a considerable challenge to banks and providers of payment services in Norway and other countries.

The Annual Report on Payment Systems is an important part of Norges Bank's oversight of the payment system. In addition to the annual update of developments and prices in the payment system, the 2004 report also discusses interbank systems and integration and developments in international payment systems.

The report is available in Norwegian on our website and will be made available in English on 23 May 2005. Price statistics are also available on Norges Bank's website.

A printed copy of the report can be ordered from Norges Bank.