UPDATED: Shops, restaurants, hair salons, cinemas and other retail establishments in Norway had to start accepting cash as payment for goods and services again on Tuesday. That’s when a new law went into effect that clarifies customers’ rights to pay with cash, instead of using bank cards or other digital means of payment.
Norway’s finance ministry has stressed that customers in Norwegian retail establishments have always had a right to pay in cash, but it wasn’t enforced. More and more retailers have refused over the past few years to accept cash, citing security- or other reasons. As of October 1, they can be held liable for fines or other sanctions if they don’t.
“Time after time we’ve seen examples of how the law (demanding cash acceptance) has been challenged,” said Justice Minister Emilie Enger Mehl. “There’s been a clear need to strengthen customers’ rights to pay with cash.”
The legal clarification won a solid majority in Parliament, not least since as many as 600,000 Norwegians still aren’t digital or simply prefer to pay with cash for budgeting or other reasons, including privacy. It can be hard to keep track of all expenditures with constant use of credit- or debit cards or other payment solutions, especially if the customer doesn’t get a receipt, and some people don’t want their account numbers attached to everything they buy at the grocery store. Foreign tourists accustomed to paying with cash at home have also been surprised when they’ve acquired Norwegian kroner and then it’s refused by merchants in Norway.
“In a digital world it can be easy to forget that there’s still a large group of people who are not digital, and they should feel confident that they can still pay with cash when they go into a store, a restaurant or a hair salon,” Mehl said. Her ministry has also made cash an important part of preparedness in the case of a national emergency. The government has long urged Norwegians to have cash on hand, also in small denominations, because of the threat of cyber attacks or other reasons that put electronic payment systems out of order.
There’s been lots of opposition to the demands for cash payment within the business community, however. Rune Aale-Hansen, leader of accounting organization Regnskap Norge, was back in the news this week with his objections to the new obligatory acceptance of cash. He claims only around 3 percent of all legitimate transactions in Norway now involve cash, and told newspaper Dagsavisen that the new law is “a gift to criminals.”
The Norwegian police’s economic crimes unit Økokrim has also cautioned that more use of cash can boost underreporting of income. “It’s easier to sneak away from control mechanisms if millions of kroner are taken out of trackable bank systems,” said Aale-Hansen.
The relatively low-price hair-cutting chain Cutters, which started up a few years before the Corona crisis began, has never accepted cash for security reasons and to keep operating costs down. It will now. Even though Cutters has already raised the price of a haircut from NOK 299 when it first opened to NOK 429 today (lower if customers pay for several haircuts in advance), it has claimed it will need to raise prices further in order to cover the costs of having cash on hand. Newspaper Aftenposten later reported that a national organization representing hair salons may still seek an exemption from the new law.
Øystein Dørum, chief economist at the national employers’ organization NHO, agrees with Cutters that cash is “yesterday’s means of payment.” He told state broadcaster NRK earlier this year that returning to widespread use of cash will “raise the danger of the black market, white-washing and robbery.” He conceded, however, that today’s “unstable world” and the rise of cyber attacks “can wipe out electronic payment systems. Then it’s good to have cash on hand.”
The Corona crisis, when fears rose that use of cash could spread infection, cleared the way for more retailers to follow Cutters in not accepting cash, and they’ve been able to, until now. Members of the organization JA til kontantar (YES to cash) are delighted with the new enforcement of cash acceptance, and expect it to be followed up. Many of its members are young and follow a trend called “Cash Stuffing,” which involves withdrawing a certain amount of cash and making it last for over a period of time. “Saying ‘yes’ to cash doesn’t mean ‘no’ to cards,” the leader of the organization, Kim Hamre. “We just want freedom of choice.”
Jan Davidsen, leader of the advocacy group for retirees Pensjonistforbundet, probably represents the largest group of customers still keen to use cash. “Digital development has gone very fast, and lots of the instruction for dealing with it hasn’t been available,” Davidsen said. Now, he says, seniors most comfortable with cash can now use it again to do what they want to do.
There are now few bank branch offices in Norway, however, where people can go in and withdraw cash from their accounts. The number of automated teller machines (called a minibank in Norwegian) has also declined, and most of them recently started charging a fee of NOK 10 (USD 1) to withdraw cash. If more people start using cash again, that may change.
Norway’s central bank, meanwhile, deemed it important less than a decade ago to invest in a colourful new series of bank notes, all reflecting a nautical theme. Norges Bank has long claimed that a country’s currency is an important part of national identity and should still be used and accepted.
NewsinEnglish.no/Nina Berglund
