The Evolution of the French Payments Landscape

  • Javier Santamaría, Chair at European Payments Council

  • 30.05.2016 01:00 pm
  • payments

In October 2015 France adopted a national payment strategy designed to speed up the innovation process of developing new payment methods and to encourage the competitiveness of the French payments industry.

The implementation of the national payment strategy will help France as it strives to meet users’ needs, particularly in terms of increasing card acceptance for low value payments. A key focus to achieving this is through the development of contactless payments and other cutting edge methods of payment (i.e. mobile payments or those made through connected devices).

Are cards the French payment choice of the future?

The number of card transactions in France hit 9.5 billion in 2014, and this is increasing by more than 5 percent every year. Subsequently, nearly half (49.8%) of France’s non-cash payments are now carried out by card, which is 3.8% more than the average across the European Union (EU). With 18% of all EU transactions being carried out in France, the country has the potential to remain a leader in card payment innovation across Europe.

The French currently use cards for both face-to-face and internet payments. Initiatives under the national payment strategy such as the development of contactless low value payments is likely to boost the use of cards even further.

Evolving traditional payment methods

In order to successfully speed up the development of innovative payment methods in France, it is crucial to reduce the use of cheques, which the country is known to favour. Cheque transactions currently represent 13% of the total volume of non-cash payments in France and make up over two thirds (68%) of cheques issued in the EU as a whole. The national payment strategy will offer an alternative by enhancing credit transfers for users within SEPA by making them easier and faster to carry out.

The process has already begun. The number of cheque transactions in France is decreasing year on year (with a decrease of 5% between 2013 and 2014). This reduction is likely to accelerate with the development of person-to-person payment solutions currently being tested on the market. In fact, credit transfers are up 5% (between 2013 and 2014), making up 18% of the total volume of non-cash payments in France. This switch to more digital methods of payments is also reflected across the EU, where credit transfers now make up 26.2% of the total volume of non-cash payments.

Encouraging innovation in payments across Europe

As European user requirements and behaviours continue to change, the payment landscapes of countries such as France will need to further evolve. In the near future, introducing schemes such as the Single Euro Payments Area (SEPA) Instant Credit Transfer (SCT Inst) scheme in all countries under SEPA can help the European payments industry become more competitive through the upgrading of payment systems and the adoption of approaches that encourage the development of new ideas satisfying evolving customer needs.

For more insight on the evolution of the French payment landscape, see the EPC’sinfographic.

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