Therefore, these “deposits” cannot be used as general means of payment and thus will pose no threat to the current deposits-based payment system. Nothing has happened since to change our point of view. On the contrary, we believe that heightened competition will give us a better opportunity to test various technological solutions. This will certainly make it possible to establish new settlement and clearing systems alongside the present infrastructure, but it cannot be assumed that this will be a disadvantage to the user. If such systems - contrary to expectations - should gain ground, then it is likely that the question of licensing with a view to ensuring equal framework conditions will quickly be addressed. Our experience from the financial industry as well as from other industries has shown that intensified competition results in improved and lower-priced products - for the benefit of the customer. There is no reason that it should be any different in the area of payments. One challenge for the authorities will be to formulate a regulatory framework which achieves a balance between the positive sides of coordination and the need for competition and innovation. The challenge for the banks will be to take advantage of the leeway within this framework in order to develop systems which are beneficial to the customer and which ensure a healthy and competitive business arena for Norwegian financial institutions. 13  BIS Review 7/2000  5.
Retail payments  Allow me to turn to a closer examination of the state of the Norwegian payment system. First looking at the retail side of the payment system - where so-called customer payments dominate - there are two factors I would like to bring to the fore: one is the (continuing) sharp increase in electronic services and the other is the stable use of cash. 3 4 5  BIS: Bank for International Settlements. TARGET: Trans-European Automated Real-time Gross settlement Express Transfer (system). NICS: Norwegian Interbank Clearing System. BIS Review 7/2000  4  3.1.1. Transition to electronic payment instruments  If we first look at electronic payment services, we see that the increase in the use of cards is what is most striking. Chart 3: Retail payment services (number of transactions) in 1990 and 1998  Retail payment services (no. of transactions) 1990  1998  444 million transactions  785 million tran sactions  22 %  12 %  25 %  25 % 63 % 53 %  Cards (both c redit a nd de bit card)  Electron ic giro services  Cheques an d other p aper-ba sed payment services  Source: Norges Bank, Annual Report on Payment Systems 1998  The use of payment cards in Norway now exceeds use in most other OECD countries6 and the rate of increase is higher than in many other countries with advanced payment systems - such as Finland and Denmark.