There are several reasons why payment costs are low in Norway. New technology resulted in an early introduction in Norway of cost-efficient electronic systems. Banks led with new solutions, and the public adopted them quickly. Banks have collaborated on both the establishment and the operation of new services. The resulting economies of scale made it possible to keep costs low. Norwegian and Nordic banks are at the forefront of developments in this area. Norway is among the world leaders in the use of payment cards. Eight out of ten card transactions take place using BankAxept, one of the solutions that banks have developed. According to Norges Bank’s estimates, the social cost of using BankAxept is around NOK 3 per payment. By comparison, payments using international payment cards cost society NOK 13, or four times as much. Credit card use is increasing. It is the point of sale, typically a shop, which pays the costs connected with use, and not the cardholder. While the merchant pays around NOK 0.10 when the customer uses BankAxept, the merchant must usually pay between 1 and  3  2  See Norges Bank Papers 5/2014. BIS central bankers’ speeches  2 percent of the purchase amount when the customer chooses Visa or MasterCard. Merchants are free to pass on this cost to card users, but this seldom happens in Norway. Customers are thus not charged correct prices when given a choice of payment solution.
As the operator of NBO, Norges Bank is also working on measures that will strengthen the settlement system centrally. 5  Committee on Payments and Market Infrastructures (CPMI) – previously the Committee on Payment and Settlement Systems (CPSS) – and International Organization of Securities Commissions (IOSCO). 6  The financial infrastructure comprises the payment system and securities settlement system, including central counterparty systems. 7  The following systems were evaluated: Clearing and settlement systems for payments, the securities settlement system, the VPS registry function and the central counterparty Oslo Clearing, the latter two in collaboration with Finanstilsynet. The evaluation was presented in the Norges Bank Financial Infrastructure Report 2014. 4  BIS central bankers’ speeches  Outsourcing Today’s financial infrastructure is based on advanced technical solutions. This places considerable demands on system developers and operators. This expertise is costly and may be difficult to retain. Owners have largely outsourced technical operations. This provides greater flexibility. At the same time, outsourcing can make it more challenging to manage operational risk. The fixed costs associated with operation and development can be high. This allows operators to exploit economies of scale. A possible result of outsourcing is that several systems use the same service provider. This may reduce costs. On the other hand, such a concentration may weaken competition, while risk is concentrated in a single provider. Any failure in the service provider may then impact large parts of the financial infrastructure. The systems are vulnerable to technical failure and to external attacks.