Overview of Payment Options in France
Payment methods in France generally align with global and European trends, though there are some unique characteristics that business owners should consider before establishing a presence in this iconic country.
One crucial aspect is the necessity of local payment options for effectively selling to French consumers. Given France’s status as the most visited country worldwide, it’s also vital to accept a variety of international payment methods and currencies.
When launching a business in France, consider offering the following payment options:
Credit and Debit Cards
Credit and debit cards are the most prevalent payment methods in France, mirroring trends seen throughout the European Union. According to recent data from Statista, 57% of transactions in France were completed using these cards in 2020.
Cartes Bancaires (CB) is by far the most widely used card type, accounting for 85% of credit card transactions in 2021. In comparison, Mastercard and Visa accounted for only 5% and 3%, respectively. CB collaborates with both networks to issue co-branded credit and debit cards, usable for both in-store and online transactions.
Interestingly, debit cards are often favored over credit cards in France, similar to trends in other European nations like Switzerland. Merchants should be aware of deferred debit cards, where the bank processes a single monthly withdrawal to cover all the cardholder’s payments, which can significantly impact cash flow.
Contactless Payments
Contactless payment options are widely available in France, with customers required to enter their PIN for transactions exceeding €50.
Growth of Online Shopping
In 2022, 20% of one-time payments in France were made online, marking one of the highest rates in Europe and a significant increase from 12% in 2019. This growing trend in online shopping is crucial for merchants looking to enter the e-commerce space, as partnering with reliable payment service providers can enhance the online purchasing experience.
Direct Debit
Direct debits rank as the second most common payment method in France, following credit and debit cards. In 2020, 19.1% of transactions were conducted through direct debits. This option is particularly advantageous for businesses offering subscription services and recurring monthly payments.
Companies with subscription models will need a payment processor that includes a global payment gateway to securely manage recurring payments from customers.
SEPA Direct Debit
The SEPA direct debit system enables EU consumers to make international bank transfers within the European Union at the same cost as domestic transactions. European merchants can leverage this system to facilitate international payments without additional costs to the customer.
Buy Now, Pay Later (BNPL)
The popularity of Buy Now, Pay Later (BNPL) options has surged in France in recent years. International players like Klarna dominate the market, while local alternatives such as Alma and Floa provide appealing choices for French consumers.
In 2023, the total transaction value for BNPL options in France reached nearly $12 billion, projected to climb to almost $22 billion by 2029. BNPL represents one of several alternative payment methods that expand choices for French consumers.
Offering BNPL can provide significant advantages, including enhanced payment flexibility for customers and the potential to encourage larger purchases. It can also attract new customers who may not have intended to make a purchase at that moment.
Mobile Payments
Digital payment methods, particularly mobile payments, are gaining traction in France. The volume of card payments made via mobile devices skyrocketed by 137% between 2021 and 2022.
Bank Transfers
Bank transfers are commonly used for substantial purchases or to settle monthly bills. They are also a good option for larger transactions within the EU, as banks are required to charge the same fees for EU transfers as they do for domestic ones. Online banking has simplified the process of making payments via transfers.
Customers need a SWIFT or BIC code to identify the bank, as well as the business’s IBAN (International Bank Account Number). This can make bank transfers less appealing for one-off e-commerce purchases, although they are a valid option for customers who prefer this method for subscriptions or recurring payments.
Cash
Cash remains a significant payment method in France. According to the Banque de France, cash continued to be the most frequently used payment method at the point of sale in 2022, a trend that resonates throughout the broader European Union, despite the rise of digital payment options.
The European Central Bank reports that 94% of French SMEs still accept cash payments as of 2024. While many French brick-and-mortar businesses are shifting focus to digital payments, accepting cash remains crucial for maintaining competitiveness in physical retail.
Cheques
France is among the few remaining countries where cheque usage persists. Although cheque transactions are declining, approximately 890.62 million cheques were written in 2023.
As noted in a report from the Federal Bank of Atlanta, France ranks as the joint-second largest user of cheques globally, along with Canada. However, overall cheque popularity remains relatively low, accounting for just 4.1% of all cashless payments in 2021.
Most French banks provide customers with complimentary chequebooks, and cheques are often utilized for large payments to avoid the fees associated with electronic transfers. However, merchants should be aware that cashing a cheque from another EU country may incur high transaction fees.
The Future of Cheques in France
The ongoing (though decreasing) popularity of cheques presents an intriguing phenomenon in France, reflecting both conformity to and divergence from trends in Europe. As a cashless payment method, cheques are somewhat outdated, and the shift towards paperless payments is likely to further diminish their use in the future.
Catering to French Consumers
Proactive business owners in France need to offer both innovative payment methods that are gaining traction and traditional options that remain valued by the French populace. This necessitates providing electronic payment solutions via cards, mobile devices, direct debits, bank transfers, and BNPL, alongside cash and cheques.
The payments landscape is ever-evolving, and business owners must be ready to adapt to shifting customer expectations to stay competitive. Integrating payment processing solutions that accommodate all major payment methods in France is essential for running a successful enterprise.