France has two interbank payment systems, one for large-value payments and one for retail payments. The large-value system is the
TARGET2-Banque de France which forms part of
TARGET2, (Trans-European Automated Real-time Gross settlement Express Transfer). CORE
handles retail payments, clearing interbank exchanges of cashless
payment instruments.
LCH.Clearnet SA provides clearing for financial instruments. Settlement and delivery of securities are performed by the
ESES France system, which has an irrevocable channel (formerly RGV) and a revocable channel (formerly Relit).
All French payment and securities settlement systems are settled in central bank money in accounts held with the Banque de France.
France is distinguished by the popularity of cashless
payment instruments and correspondingly low numbers of cash payments. The average French person made 236 cashless transactions in 2006, compared with an average of 166 in the euro area and 157 in the European Union (EU). The numbers for France, which are far higher than those recorded in Germany (209) or Italy (62)
1, can be attributed to the fact that a massive 99%
2 of French people make use of banking facilities. This situation is the result of a combination of factors: first, France's public authorities introduced legislative and regulatory changes making it mandatory to use cashless payment instruments for certain transactions; second, starting in the 1970s, French credit institutions built up dense countrywide branch networks.
1 Source: Blue Book, ECB, March 2006. The statistics given are those for 2004.
2Source: French Banking Federation.
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Payment and securities settlement systems: definitions
Article L330-1 of the Monetary and Financial Code gives the French legal definition for payment and securities settlement systems: "An interbank settlement system or a financial instrument settlement and delivery system shall mean a national or international procedure organising dealings between two or more parties that have the status of credit institutions, or institutions or companies referred to in Article L. 518-1, of investment firms or clearing house members or non-resident institutions with comparable status, for the usual execution, whether or not this involves netting, of payment as well as, where financial instrument settlement and delivery systems are concerned, the delivery of financial instruments between said participants".
A payment system is a set of instruments, rules and procedures designed to enable the transfer of funds between banking and financial institutions. Transferred payments may involve large-value amounts, like interbank and cash management transfers, or retail amounts, such as cheque or card payments, direct debits and customer transfers. Securities settlement systems handle clearing, settlement and delivery for financial instruments once the market trade is complete.
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To find out more:
Parties involved in payment and securities settlement systems
Non-cash means of payment
Retail payment system
Large-value payment systems
Securities settlement systems
1 Source: Blue Book, ECB, November 2007. The statistics given are those for 2006.
2 Source: French Banking Federation, 2005.
