While bank transfers are the preferred payment method in France, bank drafts are still used in certain situations. What are bank drafts? How are they different from personal checks? When do you use them? In this article, you’ll find answers to these questions about bank drafts, including how to obtain them and how to verify their authenticity as the recipient.

What’s in this article?

• What are bank drafts?
  
• How do they work?
  
• When do you use bank drafts?
  
• What are the benefits?
  
• What are the fees associated with bank drafts?
  
• Is there a limit to the amount of a bank draft?
  
• How do you verify bank drafts?
  
• How do you cash bank drafts?
  
• Bank draft validity period
  
• How do you obtain a bank draft?
  
• What are the alternatives to bank drafts?
  

What are bank drafts?

Bank drafts are a payment instrument that a seller can request from a buyer for a large transaction. They are a single check issued and signed by the buyer’s bank at the buyer’s request.

How do they work?

When a buyer requests a bank draft, the bank checks the availability of funds in the buyer’s account. If the account has sufficient funds, the issuing bank withdraws the funds from the buyer’s account. The amount is then debited from the issuing bank’s account: the bank, rather than the buyer, issues the draft to the recipient.

When do you use bank drafts?

Bank drafts are an attractive payment option for large purchases between individuals, such as the sale of works of art, used cars, or household appliances.

Note that since 2015, bank drafts are no longer accepted for real estate transactions over €3,000 (according to Article L112-6-1 of the Monetary and Financial Code). These transactions must be made by bank transfer.

What are the benefits?

Bank drafts are a guarantee of payment for sellers, protecting them against the risk of insufficient funds. They are a safer and more secure method of payment than personal checks because the bank issues the draft and guarantees the funds. Sellers are therefore assured that they will be paid in full.

What’s more, some sellers find it easier to leave the processing of the draft to their bank.

What are the fees associated with bank drafts?

Bank drafts generally cost between €5 and €25, depending on the account agreement and the buyer’s bank. Be aware that online banking fees are lower, and some online banks even offer the service for free.

Is there a limit to the amount of a bank draft?

In principle, there is no limit to the amount of a bank draft. However, as a buyer, you should check if your bank has its own limit.

Note that sellers can refuse to accept bank drafts for small amounts.

How do you verify bank drafts?

The issuing bank first checks the buyer’s account to ensure that they have the necessary funds to complete the transaction.

When the draft is cashed, the seller is required to verify its authenticity. The draft has the words “BANK DRAFT” in clear capital letters on the back. This text is bordered by two striped flames and framed by two sowers. This is the watermark introduced by the Bank of France in 2009.

You can also visit the issuing bank to verify the authenticity of the draft. Further, it is important to make sure that the draft is not crossed out or stained, and that it is dated and signed by the issuing bank.

How do you cash bank drafts?

As the recipient, you are advised to cash bank drafts with your bank as soon as possible to ensure the funds arrive quickly.

Bank draft validity period

A bank draft is valid for one year and eight days from the date of issue. As the recipient, you are free to cash the draft within this period. Note that the amount will remain blocked on the buyer’s account until the draft is cashed.

If the draft is not cashed within the validity period, the bank must return the amount debited from the buyer’s account.

How do you obtain a bank draft?

To obtain a bank draft as a buyer, simply send a written request to your bank (by mail, through the customer area, etc.). Provide the necessary details for the transaction, such as the recipient’s identity, the nature and amount of the purchase, and payment documentation (such as an invoice or quote).

Once your account has the funds, most drafts are approved and issued within 48 hours of the request.

What are the alternatives to bank drafts?

There are many alternatives to bank drafts: personal checks, direct debits, bank transfers, progress payments, payment vouchers, cash payments, card payments, digital wallets, and more. As a seller, it’s important to be aware of all the payment methods available to you.

Stripe’s advanced optimizations give you access to over 100 payment methods that make it easy to transact with your buyers, wherever they are. Get started with Stripe today to discover the payment methods that work best for your customers and your business—and maximize your revenue.