France Payments Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The France Payment Market is anticipated to grow with the CAGR 14.7% during the forecast period (2022- 2027). The payment market is benefiting from increased digitalization. The growing popularity of smartphones and the widespread availability of internet access are driving up demand for mobile financial transactions. Customers are also being encouraged to use contactless payment platforms by government programs. Furthermore, the integration of artificial intelligence and machine learning is anticipated to strengthen the security system, boosting consumer confidence in the payment system.

Key Highlights

• The payment industry in France is constantly evolving. As part of its National Retail Payments Strategy (2019-2024), Banque de France has devised a number of initiatives that commercial banks and payment service providers are implementing to minimise reliance on cash and move the country closer to a cashless society.
• The proposal involves encouraging merchants to accept card payments for amounts as little as GBP 1 (USD1.12), putting contactless capabilities into every payment terminal in the country, and improving electronic payment security. With these protections in place, card-based transactions are expected to expand even more over the projection period.
• Social payments, popularised by Paypal, allow users to send money via social media. Almost every central social media platform has its version. Apple Pay, Google Wallet, Facebook Payments, Twitter Buy, and similar services are available. These means of payment function similarly to a digital bank account. Users can buy things on social media sites or online merchants that accept these payment methods.
• New technology risks, particularly operational risks associated with the new payment ecosystem, with cyber-attacks at the top of the list. Reduced time to market for innovative solutions and the utilization of emerging technologies such as blockchain and new biometric identification, Artificial intelligence, and approaches are contributing to increased vulnerabilities - security flaws whose magnitude is difficult to assess.These are few factors which may challenge the market growth
• In March 2020, Federation Bancaire Francaise upped the limit on contactless cards in the country from GBP 30 (USD 33.68) to GBP 50 (USD 56.14) in response to COVID-19, in an effort to encourage customers to utilise contactless payments instead of cash for necessary purchases. As a result, customers who make payments of up to GBP 50 do not need to enter their PIN (USD 56.14).

Key Market Trends

E-Commerce is Observing Significant Growth

• The European e-commerce business has expanded rapidly, providing exciting potential for online retailers in various industries. France is a key consumer market in Europe and a significant e-commerce market. Regarding Internet penetration, percentage of e-commerce consumers, and average expenditure. According to the E-commerce Foundation, in 2020, the e-commerce sector in France is estimated to account for 4.79% of the country's GDP and is expected to increase in the forecasted period.
• According to the Federation of e-commerce and distance selling, online retailers in France making more than ten million euros per year accounted for about 74.5 % of all e-commerce revenue in 2021. With one to ten million euros yearly revenues, E-merchants accounted for 17.3% of total e-commerce revenue.
• Furthermore, pertaining to cross-border e-commerce, Belgium was the first among the five European nations where French e-retailers sold their goods or services in 2021. In that year, most e-commerce enterprises in France that sell worldwide made sales to Belgium. Belgium was closely followed by Spain.
• Fashion has always been an essential part of French culture, and while it is well-known around the world, it is also one of the country's mainstays of e-commerce. French people are pretty price sensitive; businesses can benefit significantly from offers, discounts, and bargains. This appears to be true regardless of whether the brand is a high-end or low-cost retailer. This is mainly because customers can discover enormous selections of all kinds of brands online, whereas the discount store was only profitable as a physical location. Small and large brands have benefited from the ease of shipping.

Retail Sector is a key Factor for Market Growth

• Many retailers have been investing in high-tech improvements for their storefronts and increasing their multichannel offering, taking advantage of the industry's growing spectrum of digital solutions.
• Online competition intensifies as pure players expand their beauty offerings - Amazon, Cdiscount, Zalando, and ASOS now all have beauty sections on their websites. Cosmetic companies can now market their products directly through eCommerce.
• The agile startup or online pureplay business is no longer the only preserve of the online and digital retail world. Customers have begun to see major established retail brands fight back by adopting their own digital strategies. Modern retailers are altering their core, experimenting with digital products and experiences, and investigating the metaverse as part of their digital transformation.
• The prospect of the 2024 Olympic Games, in addition to the "Maison France's" international prestige, is a fresh factor of appeal for foreign brands looking to enhance their position on the French market. The enthusiasm of the leading luxury merchants is backed up by a considerable increase in the turnover of the major luxury groups on a global scale, with a strong French representation in the international rankings.
• According to banque de france, In April 2022, turnover in retail trade was down by 0.8% against March 2022, adjusted for seasonal and working day take-ups. Food sales increased by 1.9%, whereas those of manufactured goods fell by 3.0%, impacted by the decrease in new car sales and furniture sales, which declined by 6.9% and 7.5%, respectively. Over the past three months (Jan2022-March2022), manufactured goods sales rose by 3.7%, driven by consumer electronics, which fell by 6.5% in April but rose by 6.5% over the three months.

Competitive Landscape

The France Payment market is moderately consolidated with the presence of a significant number of players in the market. However, there are a few large players in the market, such as Apple Pay, that occupy a considerable share in the market. The competitive rivalry in the market is high with various players trying to increase their revenue in the market. Players such as Amazon Pay and Samsung Pay are also trying to increase their share in the market. As such, the market players are undertaking various strategies such as enhancing the product portfolio, among various others. Moreover, the growing e-commerce industry in the country is also encouraging the development of payment menthods across the country.

• March 2022 - The platform for banking-as-a-service in France The French regulator ACPR has given Treezor permission to launch a full range of payment services. The company now holds all of the country's payment service licenses. These licenses will allow the company to accept cash deposits through the network while also allowing for the execution of payment transactions using a payment card or similar system linked to a credit facility.
• December 2021 - Numeral, a French startup, raised GBP13 million (USD 14.7 million) in a seed round led by Balderton Capital to assist the company grow from ten to forty employees, improve product development, and increase its bank coverage.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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