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Debit cards continue to dominate French payments market

Monday 7 March 2016 | 09:18 AM CET

Debit cards are expected to dominate the payments market in terms of most preferred payment method in France by 2019 as consumers are getting increasingly attracted by the convenience of contactless payments and the greater use of debit cards for online transactions, a recent study reveals.

This growth in debit cards usage will be partially supported by consumer awareness of debt control and the continued migration of low-value cash payments to debit cards. Moreover, an increase in the use of contactless cards will also be one of the major drivers of this trend, according to a report issued by Timetric, a provider of online data, analysis and advisory services on key financial and industry sectors.

By 2019, the debit card transaction volume and value is expected to reach 9.4 million and EU R432.1 million respectively, compared to 8.4 million and EUR 405.8 million in 2015.

“With the debit card market nearing maturity, banks in France have turned their focus towards niche segments such as students and the young population. Product differentiation, value-added services and benefits have therefore become key differentiating factors to attract debit card users,” comments Kartik Challa, Analyst at Timetric.

The French payment cards market recorded a large-scale uptake of contactless technology during the review period. The number of contactless transactions increased to 21.9 million as of September 2015, registering a staggering rise of 218% over September 2014. Between August–September 2015, the number of contactless payments increased by 20.8%.

“The ease of making quick payments using contactless cards has become very popular among both consumers and retailers in France. An increase in the number of retail outlets accepting contactless payments enabled consumers to opt for contactless cards. The number of contactless cards increased during the last five years, going from 3.4 million in 2010 to 50 million in 2015, which represented 60.1% of all French payment cards in circulation,” says Challa.

According to the report, the number of contactless cards and transaction volumes are expected to follow the same trend over the forecast period (up to 2019), as banks and POS solution providers are introducing product and service offerings to increase the uptake of contactless payments among French consumers and businesses.