Legend has it that the saying “to pay through the nose” originated during the Norse or Danish conquest of Ireland back in the ninth century when, it is said, the Irish peasants and nobles were compelled to pay their oppressors a cuff tribute or suffer a slit nose.
We can only say, “not proven”; there is no historical record. Furthermore, the earliest literary use of the expression in English is not found before the late seventeenth century.
The phrase means to pay reluctantly or to pay an exorbitant price, and it is likely, though not certain, that the saving originated among the thieves in England along in the sixteenth or seventeenth century, possibly in allusion to some practice among them of compelling a victim to yield his purse.