France: Embracing the Digital Wave – A €1 Trillion Future for Card Payments
A Booming Landscape
The landscape of payments in France is undergoing a remarkable transformation, driven by the digital era and the widespread adoption of connected devices. Once mere tools for transactions, bank cards are evolving into gateways to a digitalized world, offering a seamless, swift, and secure payment experience.
A Meteoric Rise Towards €1 Trillion
According to a recent study by London-based consulting firm GlobalData, the French card payment market is poised to surpass the symbolic €1 trillion mark by 2028. This phenomenal growth, which previously hovered in double digits before stabilizing around 5.3% per annum between 2024 and 2028, is fueled by several key factors:
The Surge of Electronic Payments:
French consumers, increasingly connected, are massively embracing digital solutions for their everyday purchases and payments. The convenience and speed of online and in-store transactions are compelling arguments in favor of electronic payments. This shift is evident in the growing popularity of online shopping platforms like Amazon and Cdiscount, as well as the increasing adoption of mobile payment solutions like Apple Pay and Google Pay.
The Growing Adoption of Connected Devices:
Smartphones, tablets, smartwatches… Connected devices are becoming indispensable tools for making payments. The integration of bank cards into mobile apps and digital wallets facilitates contactless transactions and enhances the appeal of digital solutions. For instance, the proliferation of mobile wallets like Paylib and Stocard has made it easier for consumers to pay for goods and services using their smartphones, without the need to carry physical cards.
Contactless Payments: Driving the Growth
Contactless payments are a key element of this growth dynamic. In 2022, they already accounted for 50% of all card transactions in France, and this trend is expected to continue in the coming years. This dominance can be attributed to several factors:
Convenience and Speed: A simple tap of the card on the payment terminal allows for an instant transaction, without the need to enter a PIN or present a ticket. This time-saving and fluid experience is particularly appreciated by hurried consumers.
Government Incentives: French authorities are actively encouraging the adoption of contactless payments, aware of their advantages in terms of convenience, hygiene, and fraud prevention. For example, the government has implemented initiatives to promote the use of contactless payments in public transportation and retail establishments.
Integration into Public Transportation: The ability to use a bank card to validate a transport ticket on buses, metros, and trams promotes the adoption of contactless payments on a daily basis. This integration has been particularly successful in major cities like Paris and Lyon, where contactless payments have become the norm for public transportation.
Regulation of Interchange Fees: The implementation of a cap on interchange fees within the European Union has helped reduce the costs of contactless transactions, making them more attractive for merchants. This regulatory change has encouraged retailers to adopt contactless payment terminals, further fueling the growth of this payment method.
A Gradual Decline in Cash Payments
Parallel to the rise of electronic payments, the use of cash is steadily decreasing in France. This trend, observed in many developed countries, is explained by several factors:
The Convenience of Electronic Payments: Bank cards and mobile solutions offer a more convenient and faster payment experience than cash, especially for large purchases or repeated transactions. For instance, using a card for online purchases eliminates the need to count out cash or visit an ATM, while mobile payment apps allow for quick and easy transactions at checkout counters.
A Robust Payment Infrastructure: France has a dense network of card payment terminals, which facilitates the use of digital solutions for everyday purchases. This extensive infrastructure, coupled with the widespread acceptance of card payments by merchants, has made it easier for consumers to switch from cash to electronic payments.
A Growing Preference for Contactless: French consumers appreciate the speed and security of contactless payments, which do not require any handling of banknotes or coins. The convenience and hygiene benefits of contactless payments have made them particularly popular among younger generations.
The Growth of E-commerce: Online purchases, which are mostly settled by bank card or dedicated digital solutions, contribute to the decline in the use of cash. The rapid growth of e-commerce platforms like Amazon and FNAC has shifted a significant portion of consumer spending away from physical stores, where cash is more commonly used.
An Attractive Market for Industry Players
The growing attractiveness of the French card payment market is attracting new players, aware of the growth potential of this rapidly changing sector. The arrival of JP Morgan within the French CB card group is a concrete illustration of this. This dynamic should foster innovation and diversification of the offers proposed to consumers, while contributing to the improvement of the quality and security of payment services. For example, new payment solutions are emerging, such as biometric cards and mobile payment apps that integrate loyalty programs, offering consumers a more personalized
