FRANCE

Source: IMF, International Financial Statistics, June 2021.

• The French central bank is the Banque de France (www.banque-france.fr).
• The Banque de France is a member of the European System of Central Banks (ESCB) and operates certain activities, such as issuing currency, under the authority of the European Central Bank (ECB – www.ecb.europa.eu).

Bank Supervision

• In November 2014, the ECB, via the Single Supervisory Mechanism (SSM), assumed responsibility for supervising the financial stability of banks operating within the euro zone. However, while the ECB has final supervisory authority over all banks operating within the euro zone, it will only directly supervise those banks classified as ‘significant’ under the terms of the SSM (115 significant banking groups have been recognized to date). ‘Less significant’ banks will continue to be supervised by the national supervisory authority, i.e. the ACPR.
• French banks and other credit institutions are also supervised by the Autorité de Contrôle Prudentiel et de Résolution (ACPR – acpr.banque-france.fr).
• The Ministry of Economy and Finance (www.economie.gouv.fr) is responsible for the regulatory regime for banks and insurance companies.
• The Comité Consultatif du Secteur Financier (CCSF) supervises relationships between credit institutions and users (CSSF – www.ccsfin.fr).
• New regulations must first be scrutinised by the Comité Consultatif de la Législation et de la Réglementation Financières (CCLRF – www.tresor.economie.gouv.fr/CCLRF).

• Lifting fees are rarely applied on payments between resident and non-resident bank accounts.
• Item-based charges and/or subscription fees are applied on payments between resident and non-resident bank accounts.

• DISCLOSED / UNDISCLOSED 

Undisclosed programmes are possibly subject to a satisfactory audit (based on factorability and performance of ledger management) and a good counterpart (rating 7 and lower on BNPP scale). 

• RECOURSE / NON-RECOURSE 

Mainly non-recourse (95%) of which 40% based on a pledge of a credit insurance policy (co-insurance). 

• STRUCTURED PRODUCTS 

Reverse factoring and syndications are possible. No maturity factoring. Tax credit financing: Tax credit for Research (CIR), including dedicated products for SMEs, VAT Financing and Ehpad (retirement homes). 

• EXPORT / IMPORT 

Direct export is used for Spain, Italy, Germany, Switzerland, Belgium, UK, Luxembourg, Portugal and the Netherlands – the two-factor system is used for all the other countries. 

• CONCENTRATION REQUIREMENTS 

No concentration limits are applied. Concentration is a factorability issue that will be assessed and managed accordingly. 

• HOLD BACK RESERVE (HBR) 

Retention operated on outstanding defined as a percentage of the total ledger may be applicable. The HBR is included in the FIU (discounting charges base calculation). 

• MAX. PREPAYMENT % 

Usually 90% but can be increased up to 95% for top clients. 

• CREDIT COVER % 

Maximum credit cover is 100 %, VAT included. 

• USUAL FUNDING PERIOD 

In general 45 to 60 days after due date. 

• OFF-BALANCE SHEET SOLUTIONS 

Off-balance sheet solutions are marketed to large corporates. 

• INVOICE TRANSFER 

Transfer of invoices is automated (over 99%) through a website or a bank protocol. If needed, a specific solution is provided to transform data from the client’s IT system according to the BNP Paribas Factor template. 

• ON-LINE APPLICATIONS 

The client can consult whatever kind of portfolio information through Transaction Management ("Gestion des Opérations“: transfer, withdrawal, debtor limit, dunning actions,etc.) plugged to Niu Viu (real time) and Co-Pilot (which offers different axis of analysis of the portfolio).

Mobile App, MyView, is also available both for consultation and for basic transactions. A full digital onboarding journey is available for 2 products (Reverse and Impulsion). 

• DELAYED DUNNING 

When a management mandate is given to the client, the usual period before the factor takes over the collection is 60 to 90 days. 

• DATA FACTORING 

Both Ledger Assignment (“cession de balance”) and Data Factoring are possible. 

• CURRENCIES OF FINANCE 

EUR, USD, GBP, CHF, SEK, PLN, DKK, CZK, CAD, JPY, NOK, SGD, AUD, RON and CNY. The “liquidity premium” differs from one currency to the other. 

• LOCAL RETAIL OFFERS “IMPULSION” 

A range of products which evolve with the needs of professional clients and SME’s, with a turnover up to EUR 1.5 million.

• Credit transfers are used by companies to pay salaries and suppliers, to make tax payments via the transfert de données fiscales et comptables procedure) and for treasury payments.
• SEPA credit transfers can be settled via CORE, STEP2 or via correspondent banking networks. STET has plans to migrate SEPA credit transfers (SCTs) from CORE to SEPA.EU. Unlike the current system used by CORE, in SEPA.EU the cycle concept will be replaced by continuous settlement with a prefunding model.
• Approximately 268 banks in France participate in the SEPA credit transfer scheme.
• High-value and urgent domestic and cross-border (within the euro zone) credit transfers can be settled in real time via TARGET2-Banque de France.
• High-value and urgent cross-border credit transfers can also be settled with end-of-day value via the Euro Banking Association's EURO1 system. Fourteen banks in France participate directly in EURO1.
• Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad.
• The European Payment Council’s SCT Inst scheme (a pan-European 24/7 instant payment scheme for SEPA credit transfers) enables the transfer of funds (the maximum threshold value is EUR 100,000) to another account in less than ten seconds. There are 126 participants of the SCT Inst scheme in France.
• The SEPA.EU platform hosts STET’s Instant Payments CSM, which launched alongside the launch of the EPC’s SCT Inst scheme.
• EBA Clearing and Italy’s SIA Group have developed and implemented a pan-European platform for instant EUR payments called RT1. It is fully compliant with the SCT Insts scheme and is in line with the ISO 20022 global messaging standards for instant payments.
• TIPS is a pan-European service for the settlement of instant payments in central bank money. The service enables payment service providers and ACHs with access to TARGET2 to offer fund transfers 24/7, 365 days a year. TIPS is aligned with SCT Insts. It is primarily focused on EUR payments but is technically capable of settling payments denominated in other currencies.

• Direct debits are used for regular payments, such as utility bills.
• SEPA direct debits can be settled on a same-day basis via CORE or STEP2.

• The cheque as a cashless payment instrument is in decline. In 2019, cheque volume and value fell 9.2% and 8.6% respectively to 1,586 million, with a value of EUR 814.52 billion.
• Cheques are truncated into electronic items before being settled on a next-day basis via CORE.
• A small number of cheques cannot be truncated. These, and cheques with a value greater than EUR 5,000, are physically exchanged within four days of presentation.
• Cheques are valid for just six months.
• Negotiable, transferable bills of exchange are also available in France. These are truncated into electronic items before being settled on a five-day cycle via CORE. There are two forms which remain out of the scope of SEPA:
  • The lettre de change relevé (LCR): an electronic trade bill, which is usually discounted to finance trade.
  • The billet à ordre (BOR): a promissory note.

• Card payments, particularly debit cards, are increasingly popular, especially for retail transactions.
• In 2019, debit card payments increased 9.1% and 6.4% respectively in volume and value terms, to 12,561 million, with a value of EUR 521.7 billion. Credit card volume and value increased 15.6% and 10% respectively to 2,047 million transactions, with a value of EUR 87 billion.
• Groupe de Cartes Bancaires (GCB) is France’s national payment card operator. It has 120 member institutions.
• There were 69.1 million debit cards and 15.4 million credit cards in circulation at the end of 2019.
• Most cards issued in France are co-branded with GCB and either MasterCard or Visa.
• American Express and Diners Club credit cards are also available.
• There are also two domestic credit card issuers: Cofinoga and Cetelem.
• Domestic card payments are processed by CORE.
• Contactless card technology is available in France.
• All cards issued are SEPA-compliant with EMV chips.

• There were 52,969 ATMs in France at the end of 2019.
• There were 2.09 million POS terminals in France at the end of 2019.
• All payments are settled via CORE.
• All ATMs and POS terminals are EMV-compliant.

• Electronic wallet schemes are available via reloadable pre-paid cards.
• Mobile payment schemes such as YouPass, Lydia, Lyf Pay, Samsung Pay and Apple Pay are available and increasingly popular.
• In 2020 Societe Generale partnered with Apple Pay to launch an instant digital card. This ‘virtual’ payment card can be issued on a permanent or temporary basis.
• E-money payments are settled via CORE.

• BNP Paribas is a key trade finance bank in France with 18 trade centres incorporating 50 senior trade managers and trade advisors to address the full range of clients' trade finance needs. A centralised competence centre supports the trade centre network providing a high level of expertise, innovative solutions and advisory services. In addition, the trade development team supports clients' international expansion ambitions by providing bespoke solutions such as tailor-made market studies, prospecting missions and research into potential partners, amongst others. Corporates benefit from high quality electronic trade finance solutions and ISO-certified documentary operations platforms.

• The EU has trade agreements in place with over 30 countries.
• The EU is currently in free trade negotiations with a number of countries, including the Association of Southeast Asian Nations (ASEAN), Australia, Indonesia, Mercosur (the Southern Common Market), Uruguay, and the USA. The EU-UK Trade and Cooperation Agreement entered into force on 1 May 2021.

Source: IMF, International Financial Statistics, June 2021.