After years of being dismissed as old-fashioned and a security risk, cash may soon re-emerge as a state-mandated means of payment in highly digitalized Norway. Cash is now even playing a role in national preparedness, with Norwegians being urged to have cash on hand in case electronic banking systems break down.
“There’s a need to clarify the rules,” Justice Minister Emilie Enger Mehl announced earlier this autumn. The government wants to strengthen consumers’ rights to pay with cash and require Norwegian retailers to accept Norwegian currency, the value of which tumbled again on Thursday’s interest rate hike but later recovered. It cost NOK 10.34 to buy one US dollar on Friday afternoon, mostly because the dollar remains strong amidst various global crises at present.
Being able to actually use Norwegian kroner notes in Norway can no longer be taken for granted, though. Growing numbers of retailers refuse to accept cash, wanting customers to only use debit- or credit cards, or other electronic payment services. During a recent annual national fundraising campaign, this year to benefit Leger Uten Grenser (Doctors Without Borders), fully 25 municipalities even dropped door-to-door cash collection. The city of Fredrikstad, for example, opted for only digital fundraising. The campaign nonetheless generated more than NOK 260 million in donations.
Mehl, however, has pointed to the “cash crisis” that arose when electronic payment systems crashed on the day before Norway’s Constitution Day holiday on the 17th of May this year. Suddenly cash was king again, since having cash was the only way to pay for bubbly at the state liquor stores, or for food at the grocery stores.
“That showed us that the ability to pay with cash must be preserved, as part of our national preparedness,” Mehl said. Her ministry has thus sent a proposal out to hearing that would ensure consumers’ rights to pay with cash, instead of just using a card or electronic systems like Vipps, “in all staffed places of business where goods or services are sold.”
Norway’s central bank (Norges Bank) launched a new series of currency just a few years ago that honours the country’s maritime heritage. It has repeatedly stated that cash remains legal tender in Norway, and that it’s illegal for merchants to refuse to accept cash. Many still won’t allow cash payment, however, and that’s what Mehl wants to address.
“Expectations of being able to pay with cash are strongest when goods or services are sold in a sales location (like a store or salon),” Mehl said. “That should be possible for everyone, also for those who either can’t or don’t want to use other means of payment (like debit or credit cards).”
Consumers are still often told that the retail outlet where they’re shopping doesn’t take cash, including the Kaffebrenneriet chain of coffee shops or Cutters discount hair salons. “That’s what we want to do something about,” Mehl said.
‘Rather go to jail’
Cutters boss Kristian Solheim retorts that he’d “rather go to jail” than have to start accepting cash for haircuts that now cost a flat NOK 399 (USD 38) without a hair wash. That’s up from NOK 299 when Cutters started up five years ago. Solheim suggested to business news service E24 that Cutters’ prices would have gone up even more if the chain had to stock cash, handle it and risk robberies.
The government is willing to evaluate whether public transport systems can be exempted from the accepting cash, for safety reasons. Retailers like Cutters and others, though, would need to start accepting cash.
Kim Hamre, leader of the pro-cash organization Ja til kontanter (Yes to cash), stresses that a cashless society discriminates against many elderly and others who struggle with digital systems. State officials have estimated there’s still several hundred thousand Norwegians who lack mobile telephones and don’t use online banking systems.
“Cash is also important in the event of a cyber attack, natural disasters or other events that could knock out digital banking and payment systems,” Hamre said. National defense and preparedness are high on the political agenda in Norway, given tensions with neighbouring Russia and recent incidents of sabotage, and state officials have urged all Norwegians to have cash on hand in case of emergency, preferably in small denominations.
The hearing process for the ministry’s proposal to ensure the right to use cash runs until December 19.