Banking in Norway

Minibank. Torggata in Oslo, 2017-01-08 At the top is a screen. When a card in inserted in the reader below the screen, to the right, and a correct pincode is inserted using the keypad, in the centre, a list of choices will appear on the screen. Select one of these by pressing a button, and follow the online instructions. Cash will appear at the bottom. A receipt will be printed and appear on the left side. Remember to take your card, when you are finished. Image: Kjetil Ree

This weblog post came about because of an email from my bank. They told me that I could not expect to have my Mastercard renewed, unless I used it. So, the next time I went shopping at my local hardware store, I took out my Mastercard, told the cashier – a person I have known for over 35 years – that I was uncertain if the pin code would work, then proceeded to buy a manageable sum of necessities, with the card. It worked. The cashier told me that his wife had also had to use her Mastercard, for the same reason.

This weblog post looks at our banking and related experiences in Norway, with a few additional comments about banking in Canada, over the past forty years. I have had to consult with Trish to see if she remembers the same details as I do. This has resulted in some changes, hopefully corrections.

When we first arrived in Molde, Norway in 1980, we opened a bank account at the first bank we encountered, Forretningsbanken = The Business Bank, located beside the bus station. There was no major problems opening an account, and we were able to deposit our savings, and withdraw them as required. We experienced it as very similar to a Canadian bank. One difference was the lack of orderly queues, one would find in Canada. People would hang around, possibly chatting to friends. Yet, everyone would know their position in this most casual of queues and wait for their opening to approach a teller. Most often, we would take cash out from our account, then visit the stores to buy our groceries or other necessities, paying for them in cash.

In these early years, everything looked expensive. We would typically visit each of the five grocery stores in downtown Molde, starting at the eastern side of town, then work our way westwards, when we reached the co-op at the western end, we would buy everything on our shopping list at the store where they were cheapest, ending up at the eastern most store at the eastern end of the bus terminal. We would then take our bus home.

As students, we were allowed to work part-time during the school year, and full-time in the summer. Our earnings were automatically deposited into our bank account. This is required procedure. All employers are required by law to deposit all wages into a bank account. Cash payments are not allowed. We also acquired cheques/ checks for other payments, but realized that the preferred method of payment was to giro funds. Soon, we opened a savings account at the local post office. It was a bit more complex, but manageable, and had a better giro system.

After our first summer of working at the local slaughterhouse, we had saved up enough money to buy our first luxury purchase, a radio. We started work at 8:00, and finished at 15:30, then walked to the centre of Molde, arriving at about 16:00. By that time, all of the specialty stores had closed. Only the grocery stores remained open, until 16:30. Thus, we decided to take a trip to downtown Molde on a saturday. We were disappointed because, during the summer, the store (singular) selling radios was only open monday to friday.

At one point we had visitors from America. They had come with an American Express card, intending to use it to pay for everything. This was not yet an acceptable payment method in Norway. The closest place that would accept their card was in Åndalnes, 57 km from Molde. They had to take a bus to get there and back, using a day in the process.

When we moved north to Bodø in 1985, we were a bit more selective about where we opened a bank account. Now, we had full-time employment and money was coming into our account every month. Money was also flowing out of our account, in the form of rental payments for our accommodation. We also had to withdraw cash to make smaller payments, for groceries, and other expenditures. Larger payments, such as rents involved use of giros.

Soon, we experienced a major change. We were issued Visa debit cards. The fun part was that we (and everyone else in Norway) were paid to use the cards. This lasted for up to several months! Stores started to accept cards for payment. Soon, human tellers were less often used, replaced by minibanks, the Norwegian word for automatic telling machines (ATMs), found at the entrance of most banks. This became the new norm of how we obtained cash. Yes, minibanks appeared in Norway at four banks in Oslo in 1970, but they differed considerably from those used later. ATMs that relied on bank cards and pin numbers first appeared in 1978.

The next step in our integration into Norway came in 1986. We talked to a loans’ officer and asked to borrow most of the money needed to buy a new car. Obviously, the person had done some homework. It took us about five minutes to secure the loan, which was for about NOK 100 000, or six months wages for one person, at the time. The money was deposited into our account on the agreed date, and we were able to pay for our new 4WD Subaru Justy, some days later.

The car loan was not paid off before we made our last move, to Inderøy, in 1988. So we had to find a new way of making a loan payment. It was not difficult. We just had to giro the money. In Inderøy we opened savings and chequing accounts at the local Savings Bank. This bank later became part of a larger, regional bank. At the end of 1990, we arranged for a mortgage on a house. Once again, there was no problem borrowing the money. The house was mortgaged, with the bank holding the house as collateral, we made a substantial down payment, and we were both employed, with regular income. The mortgage also came with life insurance, so that if one of us should die, the principal would be paid off, automatically, and the survivor would be debt free. This loan was paid off in about seven years, although the amount of interest paid was almost equal to the principal. The interest rates were about 14.5% at the time. That was the down side. The up side was that housing prices were exceptionally low. We still live in the same house.

At one time, the banks were encouraging people to invest in funds. Their financial experts would, for a fee, find the most suitable stocks to invest in, and we would have equity based on their competence. We decided to try it, with a minimum investment. After a couple of years, almost all value was lost. We stopped the experiment. A few years later, people were allowed to save a portion of their income each year, tax free, and to withdraw it and pay taxes on it, over a ten year period, after retirement. With the amount I have saved this increases my pension by 2 – 3 % a month. I think this pension ends when I turn 77. Should I die before then, the residual is turned over to my estate.

Perhaps the greatest irritation with using the banking system in Norway has been the need to provide identification to the banks. We identify ourselves whenever we open an account, but the bank fails to record it, so some years later we have to go through the identification process again. They claim this is to prevent money laundering. I am certain that anyone seriously involved in illegal banking activities has all of their papers in order, so that it is only innocent people that have to ride this identification treadmill. This last happened to us in 2021. We had to drive to a place we do not otherwise visit, find a parking space, walk to the outer door of the office, contact the person we wanted to meet by phone, wait for that person to let us into the office, present our ID, wait for it to be photocopied, recover it, then leave.

For several years, we had a safety deposit box at the bank to hold our valuable possessions. However, when the local bank moved to a new and smaller location, those boxes became unavailable. The solution was to buy a safe. It is mainly used to hold documents, such as birth certificates and passports. Sorry, there is no money, gold or diamonds in it!

For the past several years, we have not used cash. I remember one trip to Sweden where we attempted to buy lunch. The person running the eatery told us he didn’t have a card reader, but gave us direction to a bank where we could withdraw funds. We thanked him for the information, and cancelled our order. We were not going to contribute to criminal activity. Any legitimate company can buy or rent a card reader. It is one of the costs of doing business.

Originally, I dated the end of cash in Norway to the value-transport guards’ strike that lasted 78 days from 2020-09-16 to 2020-12-03. This resulted in the banks being unable to fill their minibanks. Inderøy had a empty/ non-functioning minibank for approximately five weeks. In addition, merchants could not use the night-deposit system. At the local grocery stores, it has always been possible to add an additional amount to one’s card payment and receive cash back, but I don’t think this worked optimally during the strike.

Then I had to reconsider my prophecy. Just before Constitution Day, 2022-05-17, card terminals throughout Norway became inoperative for hours. Then, on 2022-09-02, Justice Minister Emilie Enger Mehl announced a need to clarify the rules and strengthen the consumer’s right to cash payment, with companies having to make provision for cash payments during emergencies, including internet and electrical outages. Customers in Norway will have the right to pay with cash in all fixed business premises where traders sell goods and services to the public. That includes all shops, restaurants and service providers in Norway, but excludes pop-up shops, food trucks and similar operations.

If anyone is expecting Norwegians to use an armoured vehicle to transport cash, they will be disappointed. I think the vehicles are just ordinary vans, that have a safe-like structure bolted in. If there is an attempt to break in, bills will be stained with a red dye, making them unusable. Armed guards? Sorry! Not even the police are armed, although they have sealed weapons locked away in their patrol cars, should they be needed. However, they must obtain permission to unseal them. There was an experiment some years ago, where the police were armed, but there were just too many incidents where the police injured/ shot themselves.

For people interested in bank robberies, Norway’s most famous and largest robbery happened on 2004-04-05, at the NOKAS = Norsk kantantservice AS = Norwegian Cash Service Limited, depot in Stavanger. Thirteen perpetrators escaped with 57.4 million kroner = US$ 10 million, in Norwegian and foreign currencies, making it Norway’s largest-ever robbery. NOK 51 million has still not been recovered. One police officer was killed in the incident. All of the perpetrators received prison sentences totaling 208 years in prison, the longest one being 21 years.

Store hours in Norway in 2024, are very different from 1980. Our co-op now opens at 7:00 in the morning, and closes at 23:00 at night. In general, stores are closed on sundays. This does not apply for energy stations (the new name for gas stations, because they often include high-speed DC EV chargers) and their kiosks, and grocery stores, which can have an area up to 100 m2 open. We no longer have post offices. These have been replaced by post in the store centres, which are open the same hours as their host stores. For us, this is at the co-op. These provide all the same services that were once provided by post office.

Despite the experience of the Americans with their American Express card in the 1980s, times have changed. When we travel abroad we rely on our bank cards, Mastercard and Visa. They work in Canada, USA and throughout the EU (including Sweden), and Norway (a country that is not in the EU). We always purchase in the local currency, allowing our own bank to profit from the difference in exchange rates. Our bank assures us that they are cheaper than anyone else. We never withdraw cash at airports. When asked, typically in the US, if I want to pay in Norwegian crowns, I deliberately stare as deeply as possible into the eyes of the questioner. If they don’t look contrite enough I will ask them: What sort of fool do you take me for? Then I will tell them: Just take it out in American funds. I then check my receipt, without moving so that the person cannot assist the next person in the queue, until I am satisfied. Norwegian airports have billboards everywhere advising everyone to pay in local funds.

I think we have 3 x NOK 10 coins in cash, stored in Buzz, our car. We only need one, but sometimes people forget, and keep a coin or two in their pockets. One of these is used to feed a buggy at the shopping centre in Steinkjer, about 35 km north of our house. When we return the buggy, we get the coin back. Otherwise there is no need for cash.

The latest transformation has been Vipps, which is an online payment method on our handheld devices = Asus Zenfone 9 smartphones. We use this to buy eggs at a local farm, to pay for coffee at the small shopping centre in Straumen, the capital of Inderøy. I have even used it to buy a CNC machine from another person. There are any number of worthy causes that attempt to collect money during the year. Even they have had to give up collecting cash. Now, the only thing they do is go around to houses giving out pieces of paper with their Vipps number. Not everyone wants to use Vipps. The local farm where we buy milk has a card reader, and prefers us to use a bank card.

We have not entered a bank for years, because everything is done online. Just before the start of 2018, we, and almost everyone else in our neighbourhood, had a fibre optic cable installed to the house. This improved the speed and reliability of the internet. While we also have WiFi, many of the machines are connected with Ethernet cables. My accountant (Trish) regularly uses bank transfers to pay any invoices. This is usually done using a computer, with a screen large enough to read the fine print! I also make some regular payments internationally using Paypal, from a computer, with an even bigger screen, making the print almost as legible.

Keyboard propaganda. We feel comfortable using most computers, since both of us studied computer science from the mid 1970s, and had to put up with non-ergonomic keyboards, as students. From my perspective, the key to the successful use of multiple computers, is to use keyboards with the same feel, especially having the laptop and desktop keyboards match each other. While we both use Acer Swift 3 laptops with ISO nordic keyboards, Trish’s Logitech MX keys mini ISO nordic keyboard for her desktop machine is better matched than my desktop keyboard, a Logitech K860 Ergo. In terms of desktop keyboards, I have a lifetime supply (= 5), including a similar MX keys mini ISO nordic keyboard, for use when the current one wears out, possibly as early as 2030.

Increasingly, I prefer to buy things online. When we buy something from an online store, there are usually a number of payment options, including credit cards (Mastercard) or debit cards (Visa) or Vipps or, heaven forbid, delaying payment for six months, but having to pay interest. Increasingly, I use Vipps, because it eliminates a number of steps in the purchasing process. Vipps knows where I live, and any purchased goods are sent there, unless I specify something different. The amount of the purchase is not deducted from my account, until the goods are sent.

A red Maxus EV delivery van from the Norwegian post office. The sign on the side of the van reads, Nobody knows Norway better. In the background are two Pakkeboks, that hold goods of assorted sizes, awaiting pickup by customers.

Depending on what we purchase online, there are several ways in which the product can be delivered. Posten and Bring, owned by the Norwegian post office, PostNord, owned by the Danish and Swedish post offices, and a service delivering paper newspapers, run by Schibsted ASA, a Norwegian media company. Most small packages, such as books, are delivered to our postbox. Larger, heavier materials can be delivered to our front door, or picked up at our local co-op. The third option is to have the product delivered to a Pakkeboks = Package box, located outside a store (see above photo). A box can only be opened by customer’s smartphone, when the customer is beside the Pakkeboks. In 2023, we encountered similar boxes in Iceland.

So far there has not been much mention of cheques. That is because, they have not been used in Norway since 1992! We do have cheques for our Canadian chequing account, but it always feels unsafe to use them. If people want us to transfer money to them, we ask them to provide us with an account number so that we can transfer the money directly.

Wikipedia tells us: In Norway, credit scoring services are provided by three credit scoring agencies: Dun & Bradstreet, Experian and Lindorff Decision. Credit scoring is based on publicly available information such as demographic data, tax returns, taxable income and any Betalingsanmerkning (non-payment records) that might be registered on the credit-scored individual. Upon being scored, an individual will receive a notice (written or by e-mail) from the scoring agency stating who performed the credit score as well as any information provided in the score. In addition, many credit institutions use custom scorecards based on any number of parameters. Credit scores range between 300 and 999.

Orthography = a set of conventions for writing a language, including: spelling, hyphenation, capitalization, word boundaries, emphasis and punctuation. Yes, I have been influenced by over 40 years of living in Norway. Despite knowing (Canadian) English conventions, at least as they existed in 1980, I choose to subvert some of them. One of my more recent changes is a refusal to use capital letters when writing the names of weekdays and months. My spelling mostly follows British English, with a few American quirks added.