2019 J.P. Morgan Global Payment Trends

2019 Global Payments Trends Report - France Country Insights

FRANCE INSIGHTS REPORT

 


France is one of Europe’s larger e-commerce markets, marked by a love of discounting and price comparison. Despite this appetite for a bargain, the country is nevertheless still tipped for double-digit growth throughout 2019.1 Companies with smartphone-friendly shopping experiences and payment options are well-positioned to capitalize on this healthy and mature market, as the mobile commerce boom continues.

Introduction

 

The French e-commerce market is expanding at double-digit rates, supported by the strong pace of economic growth in recent years.2 In 2019, it is expected that an increased adoption of the e-commerce market will continue, boosted by a lower French unemployment rate, now close to nine percent.3 However, improvements in employment have not contributed to lift household spending as swiftly as online merchants might hope. In fact, household spending has only increased at a moderate pace in recent quarters, as household confidence declined from a high level.4 President Macron’s economic measures are business friendly but are yet to show in the World Bank’s Ease of Doing Business Index, where France does not rank among the world’s top 30 most business-friendly countries.5

This document is based on projected figures and is subject to change at any time.

Seasonal spikes in a discount-loving nation

 

France is the second-largest e-commerce market in Europe and sales have been buoyant in recent years. The country’s business to consumer e-commerce market is an €81.7 billion industry,16 accounting for 15.3 percent17 of overall European e-commerce.*

The introduction of one-off discount days and discount-driven retail appears to have underpinned recent growth, with French shoppers keen to check that they are getting the best price possible for their purchase.18 French shoppers are highly familiar with discount retail as the country is home to the world’s biggest flash sales site, Veepee, and 80 percent of shoppers compare prices before buying non-grocery items.19 "A handful of French e-commerce merchants
also introduced a discounting event called ‘French Days’ in 2018, a version of Black Friday, adding to an event and promotions-led online shopping culture.20 Political events are also shaping buyer habits. For example, protesting in the French capital in late 2018 drove shoppers who wanted to avoid the civil unrest in the streets to make their purchases online.21

 

Long-term growth projected to slow as basket spends decline

 

Despite these seasonal spikes in online spending, e-commerce growth is slowing.22 Looking forward, the market is projected to expand at a lower compound annual growth rate of 10.5 percent by 2021.23 This reduction in growth rate is in line with other mature markets, such as the UK (nine percent) and Germany (7.3 percent).24

Slowing growth is partly a result of market maturity, and similar trends are being seen across the major e-commerce sectors in Europe. However, while generating short-term growth, the prevalence of discounting in France is dragging down basket value, which will have an impact in the long term. The average basket value of purchased goods has declined for the sixth year in a row25 and average online spend per capita in France in 2017 was €1,820,26 below the European average of €2,186.27 If this trend continues, sales volumes would have to expand at far higher rates in order to support current growth levels.

 

A European click-and-collect forerunner

 

Click-and-collect delivery is a major feature of the French e-commerce experience. France has become an enthusiastic adopter of the service, where goods are delivered to local shops and public spaces rather than to homes. E-commerce click-and-collect options are growing rapidly. Amazon has announced plans to install 1,000 Amazon Lockers across train stations in France over the next five years.28 French retailer E.Leclerc has taken the concept one step further by offering click-and-collect for food. E-shoppers can now buy food and drink online before picking their items up from a refrigerated locker near a transport hub,29 or via their car from a drive-through location.

Click-and-collect’s popularity is positive for the e-commerce sector as a whole. Merchants benefit as it cuts down on the costs that arise from delivery journeys to multiple domestic addresses. It also prevents failed deliveries to buyers’ homes, which bring irritation and inconvenience to the shopper and significant costs to the e-commerce merchant.30 Meanwhile, consumers benefit from a reliable, low-cost delivery method.

Mobile commerce grows, boosted by dedicated mobile sites

 

French e-commerce shoppers still largely prefer to shop online from the home or office, with 79 percent using laptops or desktops, rather than smartphones.31 This preference, however, has been changing. The mobile commerce market is projected to grow at a far higher rate than e-commerce in general, at 25 percent between 2017 and 2021, to reach €41.9 billion in value.32 This growth is set to be boosted by rising smartphone penetration, which now stands at 67.8 percent, up from 63.1 percent in 2015.33 This still leaves a large proportion of the population yet to migrate to a smartphone device, allowing plenty of room for the mobile commerce sector to expand further. French online retailers are becoming aware of the growing importance of mobile commerce: 80 percent have created mobile versions of their e-commerce websites.34

There are counterforces at play, however. In 2018, a new regulation banning the use of smartphones in French schools was passed, which may reduce teenagers’ mobile shopping efforts.35 Lawmakers are also regulating against smartphone use in vehicles,36 as part of an effort to cut down on the nation’s time spent on their phones and improve safety and quality of life. A continued cultural backlash against smartphone usage could impact the sector in the long term.   

Domestic cards and digital wallets are e-commerce winners

 

Cards are the dominant payment method for French e-commerce, accounting for 53.9 percent of transactions.37 Online spending via card is expected to increase at a compound annual growth rate of 15.8 percent to 2021.38 This positive outlook might be explained by the prevalence of Cartes Bancaires, a domestic, highly-recognized interbank payment system in France. One Cartes Bancaires-enabled payment card is ‘Carte Bleue’, which can function both as a debit and a credit card, and is the primary payment method in France, accounting for 22-25 percent of transactions.39 The Cartes Bancaires network enjoys high visibility in France. It also operates 46,000 ATMs and the Carte Bleue cards can be integrated with other card issuers’ products.

Digital wallets are the next most popular method, occupying 20.9 percent of the market.40 Of the digital wallets, PayPal® is the most popular in France, taking up 17-19 percent of the additional payments space.41 This may be because security remains a concern for e-shoppers42 and PayPal has a strong reputation in this area. New entrants to the additional online payments space will have to prove they can offer similar levels of shopper protection.

Meanwhile, bank transfer e-commerce transactions are now worth €10.8 billion43 and are expanding at a compound annual growth rate of 24.5 percent, making them the fastest-growing additional payment method in France currently.44 However, bank transfers are predominately used for high ticket items and in terms of volume, this payment method is far less significant. This method has received increased support in France from major e-commerce merchants. For example, in October 2017, eBay began enabling bank transfer payments for its French clients.45 This may have been an effort to convert users of paper checks (still a popular physical payment option in France) to a payment method that works online, but like checks, is directly linked to the customer’s personal bank account.

Bank transfers will also be further supported by the Single Euro Payments Area Instant Credit Transfer scheme, which was launched in November 2017 and is currently live in Austria, Belgium, Bulgaria, Estonia, Germany, Italy, Latvia, Lithuania, the Netherlands, Spain, Sweden and the UK. It provides instant, 24/7 crediting of up to €15,000 in milliseconds.46 The Instant Credit Transfer scheme is slowly rolling out across other Single Euro Payments Area members, and as of 24 August 2018, 69 payment service providers based in France have joined it.47

Better security drives falling fraud rates

 

France has one of the higher fraud rates, compared with the other European countries studied,* with three percent of online buyers experiencing fraud.48 The country is beginning to get this under control however. For example, the value of card-not-present fraud, relative to the total value of all card transactions, has been falling in recent years.49 Uptake of security, checking services such as 3D Secure, is increasing and fraud rates might decline further as new regulations are introduced. The revised Payment Services Directive is enforcing strong consumer authentication for all transactions from 2019. Visa® and Mastercard® will require that European issuers and acquirers support 3D Secure version two by April 2019. The decline might also reflect a more safety-conscious approach among French consumers because of fears of fraud in this area. No fewer than 63 percent of French consumers are very concerned about credit card fraud – a much higher proportion than in Germany, Italy or the Netherlands.50 In line with trends across Europe, chargeback rates are falling,51 which is a positive indicator in a country with high card usage.

Key takeaways

 

  • France is the second-largest e-commerce market in Europe with sales of €81.7 billion52
  • The mobile commerce market is projected to grow at a far higher rate than e-commerce in general, at 25 percent between 2017 and 2021, to reach €41.9 billion in value53
  • Cards are the dominant payment method for French e-commerce, accounting for 53.9 percent of transactions54

 

Data may vary from historical figures, due to certain categories being re-stated as new information sources have become available.

* J.P. Morgan 2019 Payments Trends – Global Insights Report series includes the following European countries: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland, The Netherlands, the UK.

 

About J.P. Morgan

 

J.P. Morgan offers a full suite of payments services to enable a seamless connection across the payments continuum for clients. We bring our consultative expertise, data-driven insights, and local service around the globe to provide a more unified view of payables, receivables and cash management. Merchant Services is the payment acceptance and merchant acquiring business of JPMorgan Chase & Co. (NYSE: JPM) – a global financial services firm with assets of $2.6 trillion and operations worldwide.i According to The Nilson Report, it is also the top merchant acquirer of e-commerce transactions in Europe.ii

 

i JPMorgan Chase & Co. Q4 2018 Earnings Report 2018.

ii The Nilson Report, #1132 May 2018.

 

For more information, please contact:

 

Your J.P. Morgan Relationship Manager or visit: https://www.jpmorgan.com/europe/merchant-services/payment-insights

 

Information contained in this document has been prepared by third parties or obtained from sources which are believed to be reliable; but neither Chase Paymentech Europe Limited nor any of its affiliates warrant the completeness or accuracy of the information contained herein. Chase Paymentech Europe Limited and any of its affiliates shall have no liability to the user or to third parties, for the quality, accuracy, timeliness, or for any special, indirect, incidental or consequential damages which may be experienced because of the use of or reliance on the data or statements made available herein. Third party trademarks, brand names, products and services are only referential and Chase Paymentech Europe Limited and its affiliates disclaims any sponsorship, affiliation or endorsement of or by any such third party.

 

Chase Paymentech Europe Limited, trading as J.P. Morgan, is regulated by the Central Bank of Ireland. Registered Office: J.P. Morgan, 200 Capital Dock, 79 Sir John Rogerson’s Quay, Dublin 2 D02 RK57, Ireland. Registered in Ireland with the CRO under the Registration No. 474128.

Directors: Catherine Moore (UK), Carin Bryans, Dara Quinn, Steven Beasty (U.S.), Eilish Finan

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1 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

2 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

3 Western Europe Economic Research, JPMorgan Chase Bank, September 2018.

4 Western Europe Economic Research, JPMorgan Chase Bank, September 2018.

5 Western Europe Economic Research, JPMorgan Chase Bank via World Bank, September 2018.

6 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

7 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via CIA, 2017.

8 World Bank Open Data. ‘France.’ Accessed December 2018.

9 FEVAD, E-Commerce in France Key Figures, 2018

10 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services Data provided by Edgar, Dunn and Company, 2018.

11 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services Data provided by Edgar, Dunn and Company via FEVAD 2018.

12 Ecommerce Foundation, B2C Ecommerce Report France 2018, 2018

13 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services Data provided by Edgar, Dunn and Company via Newzoo, 2018.

14 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

15 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via ECB Statistical Data Warehouse, 2018.

16 FEVAD, E-Commerce in France Key Figures, 2018.

17 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

18 FEVAD, Bilan 2017 du e-commerce en France: les ventes sur internet en hausse de 14% sur un an, 2018.

19 Euromonitor.com, October 2013. ‘Top Five Retailing Industry Trends: France.’ Accessed October 2018.

20 LesNumeriques.com, September 2018. ‘French Days: nouvelle offensive avant le Black Friday.’ Accessed October 2018.

21 Bloomberg.com, December 2018. ‘When France’s Workers Rise Up to Protest, Amazon Gets Busy.’ Accessed January 2019.

22 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via FEVAD, 2018.

23 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

24 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

25 FEVAD, Bilan 2017 du e-commerce en France: les ventes sur internet en hausse de 14% sur un an, 2018.

26 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

27 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

28 GlobalRailwayReview.com, June 2018. ‘Over 980 French train stations to have Amazon Lockers installed.’ Accessed October 2018.

29 Epta-France.com, July 2018. ‘Epta et E.Leclerc renouvellent l’expérience d’achat dans le centre-ville d’Anglet, avec les #EPTABricks.’ Accessed October 2018.

30 Raconteur.net, September 2018. ‘Decarbonising deliveries: making logistics sustainable.’ Accessed October 2018.

31 FEVAD, Bilan 2017 du e-commerce en France : les ventes sur internet en hausse de 14% sur un an, 2018.

32 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

33 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Newzoo, 2018.

34 FEVAD, Bilan 2017 du e-commerce en France : les ventes sur internet en hausse de 14% sur un an, 2018.

35 CNN.com, July 2018. ‘France bans smartphones from schools.’ Accessed October 2018.

36 LeFigaro.com, February 2018. ‘Le téléphone en voiture est interdit, même à l'arrêt.’ Accessed October 2018.

37 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

38 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

39 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

40 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

41 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

42 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Eurostat, 2017.

43 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

44 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

45 Tamebay.com, October 2017. ‘eBay France enables sellers to offer Bank Transfer payments.’ Accessed October 2018.

46 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via European Payments Council, 2018.

47 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via European Payments Council, 2018.

48 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Eurostat, 2017.

49 Fico, 2018. ‘European Fraud Map 2017.’ Accessed December 2018.

50 Aite Group, 2016. ‘Global Consumer Card Fraud: Where Card Fraud is Coming From.’ Accessed December 2018.

51 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Kount, 2018.

52 FEVAD, E-Commerce in France Key Figures, 2018.

53 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

54 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

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