Payments in France: An in-depth guide

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  1. Introduction
  2. The state of the market
  3. Payment methods
    1. Current usage
    2. Emerging trends
  4. Ease and friction of entry
    1. Taxes
    2. Chargebacks and disputes
    3. International payments
    4. Security and privacy
  5. Key success factors
  6. Key takeaways
    1. Offer varied payment options
    2. Facilitate quick cross-border transactions
    3. Simplify checkout

Introducing your business into the French market can generate growth opportunities, particularly for e-commerce businesses. In 2022, 77% of French people bought something online, highlighting the trend toward online and digital payments in the country. Taking advantage of this digital payments trend and accepting payments in France requires determining which payment options to offer, how to comply with local laws and regulations, and how to process cross-border transactions.

Below, we’ll cover the strategies foreign businesses can deploy to expand into France:

  • Offering varied payment options
  • Facilitating quick cross-border transactions
  • Simplifying checkout

The state of the market

The French payment ecosystem includes a variety of payment methods, similar to those found in the United States and the United Kingdom. From card networks such as Cartes Bancaires to digital wallets, France represents an interesting mix of longstanding and recently introduced payment methods. French customers expect to see prices presented in their local currency, the euro, though accepting international payments in other currencies is also important for France’s flourishing ecommerce and tourism markets.

While the financial sector is guided by a strong set of regulations, it is resilient and comprises a diverse set of payment methods. The Banque de France, the country’s central bank, shapes monetary policy, while the Autorité des Marchés Financiers (AMF) is responsible for regulatory oversight of France's financial market. The broader European Union framework also heavily influences regulatory compliance.

Payment methods

France’s payment sector includes an array of options that range from traditional methods such as cash and credit cards to more modern digital alternatives. Here’s an overview of popular payment methods in France.

Current usage

Many French customers still use cash and cards often. As of 2022, cash accounted for 50% of point-of-sale (POS) transaction volume in France. That same year, credit and debit cards comprised 43% of POS transaction volume.

The number of contactless payments in France increased from 6.8 billion in 2021 to 8.6 billion in 2022. Mobile payment adoption has increased significantly in recent years, especially among younger populations who are more comfortable with digital technologies. This shift indicates increased consumer acceptance of mobile payments and growing confidence in the security of mobile payment options.

In the business-to-business (B2B) sector, credit card payments and wire transfers are common. However, buy now, pay later (BNPL) options such as Mondu have expanded into France and provided customers with access to more flexible payments. Single Euro Payments Area (SEPA) transfers, which allow for quick cross-border transactions in Europe, also enable seamless B2B payments.

  • Credit cards (e.g. Cartes Bancaires)
  • Digital wallets (e.g. Lydia)
  • Bank transfers
  • BNPL (e.g. Alma)
  • Credit and debit cards
  • Wire transfers (e.g. SWIFT)
  • Bank transfers (e.g. SEPA)
  • BNPL (e.g. Mondu)

BNPL payments in France are forecast to increase 15% annually and surpass 13.7 billion USD in 2024. Local providers such as Alma offer benefits for both customers and businesses, allowing customers to pay for purchases in instalments while businesses receive the full amount upfront from the BNPL service.

Ease and friction of entry

Payments in France require creating a strategy that addresses multiple business concerns, including proposing a unified commerce experience and a variety of payment methods, accepting international payments, collecting tax, and adhering to government payment security mandates. Here are a few factors to consider:

Taxes

France levies value-added tax (VAT) at a standard rate of 20% for most goods and services. While customers must pay VAT, the majority of businesses are responsible for collecting and remitting it to the government. Late or improper VAT remittance can result in steep fines, and non-compliance can trigger audits and legal repercussions.

Chargebacks and disputes

In France, chargebacks and disputes are handled in accordance with European regulations, though each credit card network has its own chargeback policies. French businesses are bound by the Consumer Code, which places responsibility on businesses to prove a transaction was legitimate. This is particularly relevant in cases of unauthorised transactions.

As part of the European Union, France has implemented the Payment Services Directive 2 (PSD2), a directive that requires strong customer authentication. This requirement often influences how chargebacks and disputes are handled, as the level of verification can be cited in dispute resolutions.

International payments

Whether you’re accepting in-person transactions from international tourists or ecommerce sales from nearby countries, any business handling international payments in France must contend with currency conversions and fluctuating exchange rates. This can increase the complexity of international business operations. Some things to consider:

  • Currency conversion
    Currency conversion in France is subject to EU regulations, notably the PSD2, which mandates full transparency in conversion rates and fees. Financial institutions and payment providers must disclose all costs associated with their currency conversion services, including any service fees and the exchange rate markup over the interbank rate. The interbank rate is the baseline rate for currency conversion at which banks lend to each other, and financial institutions typically add a markup to this rate for their currency conversion services. Third-party payment providers such as Stripe can simplify cross-border transactions for both customers and businesses.

  • SEPA transfers
    The Single Euro Payments Area (SEPA) payment method, applicable across Europe, makes it easier to perform cross-border transactions in euros. In 2021, France sent more SEPA credit transfers than any other country, except for Germany.

  • Payment methods from other European countries
    Accepting popular payment methods from other European countries, such as Belgium’s Bancontact, can improve conversion rates for international customers by eliminating barriers at checkout.

Security and privacy

France has a comprehensive approach to payment security, compliance, and regulation, and has often been an early adopter of EU guidelines and directives. Compared to other countries of similar economic standing, France’s regulations are neither particularly lenient nor overly restrictive. One aspect that distinguishes France is its emphasis on transaction safety, demonstrated by the rapid adoption of EMV chips and integrating local card networks with global payment systems. Here are some important aspects of France’s security and privacy regulations:

  • Data protection laws
    One of the leading data protection regulations in France is the European General Data Protection Regulation (GDPR). GDPR sets the standard for customer data protection, requiring explicit consent for data collection and granting customers the right to be forgotten.

  • Payment Services Directive 2 (PSD2) compliance
    The PSD2 also plays an important role in French regulations. Under PSD2, payment service providers must adhere to Strong Customer Authentication (SCA), and transactions often require two-factor authentication to proceed. New requirements will be added to this as part of the PSD3 publication.

  • Anti-Money Laundering (AML) laws
    France also follows EU directives on AML and counter-terrorism financing (CTF). Financial institutions are required to implement systems that monitor and report potentially suspicious activities, and failure to do so can result in severe penalties.

  • EMV chip technology
    France was an early adopter of EMV chip technology for card payments, setting a standard for card security that has influenced other markets. These chips create a one-time code for every transaction, making it difficult for fraudulent actors to skim information.

  • Tracfin’s oversight
    The Treatment of Information and Action Against Clandestine Financial Circuits (Tracfin) is a French government unit that specialises in Anti-Money Laundering efforts. Tracfin reviews and investigates suspicious financial activities and provides another layer of financial security.

  • Payment service provider regulations
    Payment service providers such as Stripe must adhere to local regulations and often go beyond basic requirements, employing machine learning algorithms to detect fraudulent patterns and secure customer data.

Key success factors

Although France is at the forefront of many payment innovations, the country grapples with challenges such as technology adoption and a strict regulatory environment. Addressing these issues is important for successfully operating in France. Here’s how to approach payments in France:

  • Established and emerging payment methods
    While the French mobile payments market is expected to rise 30% every year until at least 2027, mobile payments are not yet universal. This highlights the need for businesses to support an array of payment methods, including traditional credit and debit cards.

  • Simplified international transactions
    Although SEPA payments have simplified cross-border payments within Europe, transactions that occur outside this jurisdiction have their own challenges, such as exchange rate fluctuations and divergent regulations. Partnering with a trusted third-party payment processor to accept international payments can simplify international transactions for businesses.

  • Card fraud mitigation
    According to a Banque de France report, 0.059% of card payments were fraudulent in 2021 – a substantial rate when you consider the sheer volume of these types of transactions. As a result, businesses should invest in sophisticated fraud detection systems and implement efficient chargeback management protocols to address fraud.

  • Smooth checkout processes
    Optimised checkout flows, accessible customer service, and transparent refund policies can all reduce cart abandonment and improve the checkout experience. Over time, these approaches build a company’s reputation and trust with local customers.

Key takeaways

Due to evolving customer expectations and technological advancements in the French market, businesses must create a strategic plan for each aspect of the payment process. This includes diversifying customers’ payment options, facilitating effortless cross-border transactions, and reducing the number of steps at checkout. Here are some tips to help make your expansion into France successful:

Offer varied payment options

  • Accept traditional credit and debit cards
    Accept traditional card payments alongside more modern digital payment methods, to ensure you’re meeting customers’ preference – especially for in-store purchases.

  • Adapt to mobile payment preferences
    Keep your payment systems up to date to accommodate mobile payment and digital wallet preferences – including local platforms such as Lydia – and enjoy the benefit of quicker transactions.

  • Implement multicurrency options
    Expand payment options to include multiple currencies and popular payment methods from other European countries such as Switzerland and the UK. Given France’s position as a leading tourist destination, as well as the diverse background of its residents, this can improve sales and boost customer satisfaction.

Facilitate quick cross-border transactions

  • Get familiar with SEPA transfers
    SEPA transfers are important, especially for B2B cross-border payments within Europe. Offer this option when invoicing international customers.

  • Incorporate BNPL payments
    Accept BNPL options for both customer and business transactions, such as Mondu for B2B customers and Alma for B2C payments. These flexible payment methods can make larger purchases more accessible for domestic and international customers alike.

  • Detect and prevent fraud
    Apply machine learning–based fraud detection tools, employ 3D Secure authentication for online transactions, and provide clear reporting channels for suspicious activity.

Simplify checkout

  • Reduce checkout steps
    Optimise your online checkout flow by reducing the number of steps required for a customer to finalise their purchase and integrating one-page or one-click checkout.

  • Provide accessible, real-time support
    Provide customer support in French to resolve issues quickly and make the payment process smoother for customers. Options for live chat or immediate customer support can resolve payment issues and create a more satisfying payment experience for your customers.

  • Simplify refund procedures
    Establish a straightforward, transparent refund process. Write a clear refund policy and communicate it clearly to your customer base.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practice in your jurisdiction for advice on your particular situation.

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