While shopping or travelling in France you have seen small posters saying "La maison n'accepte pas les chèques" (The house does not accept checks) and you wonder what this is all about? How to pay in France? Can I open a bank account in France? What information can a bank request from you? Can the lack of information about a customer or an unusual movement on the account justify blocking the account? How do you unblock an account? Explanations in this article.
According to the Regulation on cross-border payments in euro No 2560/2001/EC, banks have to charge cross-border withdrawals and payments by debit or credit card or bank transfer like domestic transactions (as long as the payment is under 50.000 €).
French residents for tax purposes or those who act within their professional scope are allowed to make cash purchases of up to the value of €1,000 (€ 3,000 if you pay with e-money). For tourists, as long as the purchase does not serve a professional activity, the limit is €15,000. As long as the amounts to be paid are under these limits, the trader must accept cash. Above these limits, the consumer needs to use another payment method such as cheques or bank cards.
A trader can however refuse to accept more than 50 coins. Concerning bank notes their number is in principle unlimited. But as in principle, the consumer must pay the exact amount, the trader can refuse high-denomination bank notes if the price is much lower than the value of the bank note. A trader can also refuse damaged or stained bank notes, especially if the security features cannot be seen properly.
Please note, during the COVID-19 pandemic, consumer have been encouraged to rather use card payments and not cash.
There are no restrictions on cash payments between consumers (such as for the purchase of a car), but if they exceed €1,500, an invoice is required to prove that the payment was made.
Article D112 ‐3 of the code monétaire et financier and Article 1840 J of the code général des impôts ‐ sanction: up to 5 % of the amount paid if it exceeds the authorised limit. Both parties are responsible for the payment of the fine.
Attention: Cash payments at local government finance offices are limited to €300. These include payments of VAT, income tax, local taxes, fees (e.g. audiovisual licence fee), fines, as well as hospital bills or rents paid to public institutions.
We thank the European Consumer Centers for the provided information. Utmost care has been dedicated to their composition. However, the ECC France does not guarantee the accuracy of the information.
The use of credit cards may not be as common as in many other countries. The most common bank card in France is not a credit card, but rather a debit card that deducts withdrawals and payments directly from the account balance (“carte bleue”).
In many shops and restaurants you will be able to pay with a Maestro, Master or a Visa Card. There might be a minimum amount, so you should always check before ordering. Indeed the trader can only refuse a payment by card if you have been prior informed about this. You may read signs saying “Paiment en CB à partir de 8 euros” for example. However, during the COVID-19 pandemic, consumer have been encouraged to use card payments even for very small amounts.
You may also be asked to prove your identity with your identification documents. In small towns or away from tourist areas, it is always useful to have some cash with you.
Good to know: Taxis in France should accept card payments.
Also, not all French card reading devices can read the magnetic strip on your card as French cards usually use computer chips which require a secret PIN code to validate all operations (cash withdrawals, payments in shops…).
Bank cards can be direct debit (the amount of money will be immediately withdrawn from your account) or deferred debit (withdrawal operations take place only once a month).
If you plan on buying petrol, make sure you have the right card.
The "chargeback" procedure for obtaining a refund
Have you paid by card for a purchase or a service to a seller in Europe who has not respected his commitments and who does not respond to your reminders? Is the product ordered on a Spanish site a counterfeit? Are you the victim of a subscription trap? In some cases, you can request a refund of amounts paid via the "chargeback" procedure. More information in our article "The chargeback procedure".
Payment opposition: what is it?
In principle, according to French law, you cannot revoke a payment order you made by card once it has been received. On the other hand, you can oppose a payment by card made in the following circumstances (article L-133-17 du code monétaire et financier):
- Loss or theft of your card,
- Fraudulent use of your card or its data, for example when you still have your card but its number and expiry date have been stolen and used fraudulently following a hack (more information in our article on card fraud). In this case, dispute the fraudulent debits in writing to your bank as soon as possible (upon receipt of the account statements) and at the latest within 13 months for a debit in the EU, Lichtenstein, Iceland and Norway or within 70 days for a fraudulent payment outside the European Economic area.
- Liquidation of the trader on the day of payment. Opposition is only possible as long as the transaction amount has not yet been credited to the trader's account.
- If you have made a payment without knowing the exact amount and if the amount debited ultimately exceeds what you expected in view of the circumstances and the goods ordered or the service subscribed, for example if you have been the victim of a subscription trap (article L-133-25 du code monétaire et financier). In this case, you must submit your request for reimbursement to your bank within 8 weeks of the debit of the sum.
New EU rules of Directive (EU) 2015/2366 (“PSD2”) to protect consumers impose strong customer authentication. For in person purchases in shops, this means having to enter your PIN when paying by card. Whereas payments of less than 30 € are exempt of strong customer authentication, banks will have to verify the customer’s identity when making more than 5 payments since the last authentification or if payments total 100 €. This means, consumers makings repeated contactless card payments, will have to type their PIN for authentication purposes even if the shop accepts contactless payment.
However, due to the coronavirus epidemic, the EU and many of its Member states encourage the use of contactless payment. The European Banking Authority (EBA) calls on traders to make use of the exemption for strong customer authentication up to 50 € as allowed under Commission Delegated Regulation (EU) 2018/389.
- In France from 11th of May 2020, the limit increases from 30 € to 50€. Many banks impose a maximum payment ceiling of 50 to 100 €, the consumer then needs to enter again the PIN so that the card can function as contactless payment method again.
France is one of the last EU countries using this payment instrument. Banks provide to their customers checkbooks with 20 detachable cheques free of charge.
This means of payment is free of charge for a domestic transaction. However, there sometimes are very high transaction fees for cashing cheques from another EU country. Indeed the Regulation on cross-border payments in euro No 2560/2001/EC, which says that banks have to charge cross-border withdrawals and payments by debit or credit card or bank transfer like domestic transactions (as long as the payment is under 50.000 €) does not apply to payments made by cheque, as there is no central cheque clearing system within the euro area. Since they are no longer accepted as a method of payment in many EU countries, and given the important fees, it is strongly advised not to use them for any international payments within the EU.
If you are living in France and are in a possession of such cheques, you may pay your shopping with them unless the trader has informed you prior to your purchase via a sign or poster or so that they will not accept cheques « La maison n’accepte pas les chèques ». You may also be asked to prove your identity with your identification documents.
You should also know that a French cheque is valid 1 year and 8 days. It is strictly forbidden to write cheques if your account then becomes overdrawn. The cheque will be returned to your bank in full or partially and you will be forbidden to write another cheque on any of your accounts in any bank for the next 5 years unless you can correct the situation called “interdit bancaire”. You will be registered at the “Fichier Central des Chèques (FCC)” of the Bank of France.
If you do not respect this prohibition to issue cheques this can be considered a criminal offence and you will be liable to penalties (article L163-2 du Code monétaire et financier).
This means of payment widely used in France enables an electronic transfer of funds from one bank account to another. It is most commonly used to pay a rent, or for instance to transfer money on a savings account.
This means of payment is harmonized in the EU under the name of Single Euro Payments Area (SEPA). This new harmonization enables customers to make transfers to another bank based in the SEPA Area for the same fee as for a national/domestic transaction of the same value in Euros if you indicate the IBAN (International Bank Account Number) and BIC (Bank Identifier Code) also known as SWIFT Code of the recipient in the transfer form.
This means of payment is generally used for recurrent payments such as electricity, gas, telephone and water bill payments. If you choose this means of payment, the initiator of the direct debit will require your approval by obtaining a signed authorization from you (“autorisation de prélèvement”) which you will send with your international bank details.
It is a common practice for some service providers(e.g. bills and regular payments such as rentals, insurances, electricity and gas, telephone, internet access, etc.) to require the payment by direct debit ("prélèvement automatique"). This is usually mentioned in the subscription service contract signed by the consumer.
Concerning rental agreements, imposing direct debit is a forbidden clause and considered as “unwritten” under the French law. So even if you have signed a contract containing such a clause, it has no legal value and you are entitled to use other payment methods. The French “Commission des clauses abusives” has asked to delete this clause in various contracts concerning different services.
- If you do not wish to use a direct debit - for instance, if you are wary of potential errors - , and if you have a French bank account, you can use the payment slip TIP or “Titre Interbancaire de Paiement”) that is attached to most utility bills. A TIP authorizes the full payment to be deducted directly from your account and you do not need to send a check.
- If you don’t have and don’t want to open a French bank account, don’t forget that within the EU you can easily pay by bank transfer, which is free of cost within the EU.
- If you prefer to pay by direct debit, but from an account in your home country, you can use the Single Euro Payments Area (SEPA) direct debit. But please be aware that it is still common practice in France for many traders to ask for a direct debit only from an account in France. So you may have to insist on your rights in the Single Euro Payments Area (SEPA).
What exactly is a local currency? How does it work? Why was it implemented?
France has over 40 local currencies. Local currency has existed since 2014. They can only be used in a restricted area and are used to purchase a limited product range. Their purpose is to encourage local businesses. The key idea is to restrict the cash flow so that it only circulates within a specific local network of businesses. For example : you buy your bread at a local bakery with your local currency. Your baker receives the currency and buys his flour with the same currency, etc. This system favors shorts circuits and therefore the local economy.
Most currencies are created by associations, managing it with the help of a financial institution. The majority of them are printed, but some of them are shifting to digital currency. In some regions, you can also obtain a bank card to pay with a local currency. Please note that the local currency does not replace the use of the normal European currency, the Euro.
How to get complementary local currency (CLC)?
- Be a member of the association offering such a currency or ask them if you need to enroll, each association has its own personal operating mode;
- Exchange your euros for the currency. For most of them 1€ = 1CLC, but some localities decided to implement a bonus for the use of CLC such as 20€ = 25CLC (the local authorities invest this money and complement the missing funds);
Where does the money exchanged go? The euros you used to exchange for CLC are kept in a bank chosen by the association as a guarantee of its value. Some localities use these funds to finance local projects.
Good to know: On May 12th, 2018 the French capital has launched its local currency “la pêche”. Born in Montreuil in 2014, the city of Paris has decided to implement it due to its success. 1 Peach = 1 Euro. The name of this currency comes from the fruit “peach” and is a tribute to the fruits which were cultivated in Montreuil and conveyed to the capital for the purpose of the Royal Court.
As a French resident, you have a right to a bank account free of charge (or for a reasonable fee) and with all basic features.
If a bank refuses to do so, you can refer the matter to the Banque de France who will designate an institution which will have to open your account.
Which services are considered basic banking features
- A payment card with systematic authorisation (possibility of online payments and cash withdrawals in the EU) ;
- The cashing of checks and transfers ;
- Payments by SEPA direct debit, SEPA TIP or SEPA bank transfer (over the counter or remotely for the transfer) ;
- Means of remote consultation of the balance of the account and the monthly sending of statements of account ;
- Cash deposits and withdrawals at the counter ;
- Two bank cheque forms per month or equivalent means of payment ;
- However, there is no checkbook, nor any possibility of authorised overdraft, within the framework of these basic banking services.
Conditions to fulfil
- You are a French national living abroad or a foreigner legally residing in a European Union country other than France ;
- You do not already have a deposit account in France ;
- The right is also applicable if you are overindebted, or baned from banking (“interdit bancaire”) ;
- You have received a refusal by a bank. Always ask the bank to provide justification: Indeed a bank has the right to refuse you the opening of a bank account, but it must then provide free of charge a certificate of refusal to open an account and indicate its reasoning.
Procedure to follow
- We would recommend that you express your wish to open the account in writing, ideally be registered letter, and keep a copy of your letter.
- If, after having expressed the wish to open an account with a banking institution you receive a refusal or you do not receive a reply at all within 15 days, you can refer the matter to the Banque de France.
- You will need to provide at least :
- A proof of refusal or your letter or, if it remained unanswered (dating back more than 15 days), the acknowledgement of receipt or the proof of deposit to the bank ;
- The completeted application form of the Banque de France ;
- Your official ID ;
- A proof of address less than 3 months old ;
- Which bank you would like, even if it might not be the one the Banque de France will designate, and the geographical area.
- Once the Banque de France has received all necessary documentation, it will designate within 24 hours a bank which will be required to open a deposit account for you, free of charge. This designation is valid 6 months and both you and the bank will be informed about the name of the bank.
- A maximum of three days is allowed for the bank designated to inform you of the supporting documents required to open the account.
- Once you have received the designation letter, you have 6 months to take the necessary steps with the designated bank.
- You must then contact the bank, and if you have provided all documents, the bank has three days to open the account. Usually you will have to be present to finally open the account.
- Keep a record/copy of all documents submitted to the bank.
Banking, payment services, neobanking, fintech... what are the differences?
- A bank, like a credit institution, is an undertaking whose business is to receive deposits or other repayable funds from the public, to grant credit for its own account and to provide payment services (means of payment, credit transfer, direct debit, deposit of money, withdrawal of money from accounts, etc.). More information in the Payment Services Directive (PSD1) 2006/48.
- Online banks are banks whose accounts are managed exclusively through the Internet. Some online banks are backed by traditional physical banks, others are not. They generally offer a wider range of products than neobanks (life insurance, stock market, savings accounts, etc.).
- A neo-bank is a bank where all operations are done via your mobile phone. 100% mobile banking solutions exist in France, Germany, Lithuania and many other European countries. In principle, only credit institutions can be called "neobanks" in France. But many payment service providers are wrongly called so on the Internet.
- Payment Service Provider: an institution that issues and manages electronic money and provides payment services (e.g. for online purchases). More information in the Directive 2007/64/EC (PSD2).
- Fintech: Contraction of "Financial" and "Technology" (financial technology). This term refers to companies providing financial services through innovative solutions in mobile payment, savings, insurance, credit, online financial advice, crowdfunding... This includes neo-banks, neo-insurance, and other online financial players.
Has your German neobank suspended your account and is asking for specific information or a photo of you with your ID card? It is possible and even legal! Banks, neobanks and other payment services are obliged to know their customers and monitor their transactions in order to combat money laundering and terrorist financing. But in Europe, these "know your customer" procedures are highly regulated in the financial, banking and insurance sectors.
The list of financial organisations that have an obligation to identify and know their customers and to verify their transactions is restrictive. All actors subject to these obligations are listed in France in the Monetary and Financial Code.
These include banks, online banks, neo-banks, fintech, insurance companies, gambling and betting companies, investment companies, payment service providers such as online payment or money transfer platforms (Paypal, Western Union...) or payment card solutions without bank accounts...
In the banking, financial and insurance sectors, the information that you may be asked to provide as part of "know your customer" control procedures is strictly regulated. It may only be used for the purposes of combating money laundering and the financing of terrorism. These regulations are transposed and completed in France in the Monetary and Financial Code (the so-called LCB-LT regulations).
When opening an account in the EU, banks, credit institutions, payment service providers, neo-banks and fintechs may therefore ask you for an identity document and proof of address. To ensure that you are the holder of the ID presented, an online bank/neo-bank may ask you to take a photo of yourself with your ID. In Germany, video identification procedures are even becoming more common.
The European banking supervisory authorities validate the procedures and guarantee that they comply with the legal obligations in terms of "Know Your Customer" procedures. E.g. the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg has specified all the steps to be followed and the guarantees to be given in the event of the identification of new customers by "video chat", which some European neo-banks practise.
When subscribing to certain services, you may be asked for other documents concerning you in order to meet the obligation of advice of European banks, neo-banks, etc.
Examples: proof of income and/or assets + information on your family situation to subscribe to a savings product, explanations on the origin of the money if you subscribe to a life insurance policy to avoid any risk of money laundering.
When a transaction could potentially be fraudulent (your account is suddenly credited with a large sum of money without any details of the transfer or you transfer an unusual sum of money from your account to an external account), the bank may ask you about the origin of the funds or even ask you for proof (purpose of the transfer, tax identification number, proof of residence, proof of income, etc.).
Please note! An unusual transaction is not the only scenario that justifies controls! The regulations provide for several other cases that require the bank to take enhanced vigilance measures (transactions of a certain amount, involving high-risk third countries, etc.). More information in French on the website of the Ministry of the Economy.
If the bank cannot obtain proof of the legal origin of the funds received into or transferred from your account, it is obliged to alert the national authority of the country in which it is located. In France, it is with the "Service de Traitement du renseignement et action contre les circuits financiers clandestins" (TRACFIN) that the report of suspicion must be made. A German neo-bank will make such a report to the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). It must report all sums of money or transactions that it suspects to be the result of an offence punishable by more than one year's imprisonment or that it knows to be related to the financing of terrorism. The bank may even close the account.
Any bank or other due diligence provider that fails to monitor or report the suspicion of fraud faces criminal penalties of up to 100 million euros or 10% of annual turnover. In Germany, the fine can be up to 5 million euros or 10% of annual turnover.
Example: A German neo-bank was fined a total of €4,250,000 because of shortcomings in the fight against fraud, in particular in the identification process of new customers. This neo-bank was also forced by BaFin to limit the number of new accounts opened per month for a certain period of time.
In most cases, if your account is checked for unusual activity, you may not even notice because the analysis is so automated and fast these days. But many providers, such as online banks and other online payment or money transfer services, may have to suspend activity on an account while they confirm or deny suspicions, or even close it permanently.
Your account is suspended
If your neo-bank suspends your account, it usually informs you promptly and asks you to provide certain information (e.g. proof of the contract for the sale of your car to justify crediting a large sum to your bank account).
Send them the requested information and supporting documents as soon as possible. If you have any doubts, contact them.
If your neo-bank does not react to the sending of your proofs and leaves the account suspended, contact it via all the means of communication in place (e-mail, telephone, etc.) and also online chats.
Don't forget to save your exchanges by capturing images of the online chat in order to prove that you have already made a claim if the discussion is terminated by your interlocutor.
Your account is closed
Your neo-bank announces the closure of your account within 72 hours and asks you to provide your international bank details (IBAN and BIC) for the remaining balance? Act quickly! Otherwise, the amount will be blocked and the account closed.
- Transfer the balance of your account to another bank account and keep any proof of the remaining balance if necessary (by taking a screenshot or generating a bank statement if possible).
- If you do not have another bank account, open one quickly. More information on your right to an account in Europe.
- If you have not acted within 72 hours, insist that the neo-bank contacts you, providing your IBAN and BIC and asking them to transfer the balance within a reasonable time.
If you do not know why the bank is asking you for personal information, if your account is suspended despite the information provided, or if your account is closed and the balance frozen, the following remedies are available:
- contact your bank's mediator. Since 2015, Europe has made it compulsory to have one or more alternative dispute resolution (ADR) bodies in all consumer sectors in all EU countries. Please note! In France, you must first contact a customer service before you can contact the ombudsman of the service provider concerned. This service is normally mentioned in the general conditions of your contract and the contact details of the mediator appear on your account statement. In other European countries, you can usually contact the ombudsman more quickly. To find a competent ADR in another EU country, visit the European Online Dispute Resolution Platform.
- Or make a complaint to the financial dispute resolution network FIN-NET. This network can help you to resolve your dispute with a financial services provider established in another EU country, Iceland, Liechtenstein or Norway.
- To report your problem with a bank, insurance company or intermediary in the banking sector, or to ask a question about the regulations, you can contact the Autorité de Contrôle Prudentiel et de Résolution auprès de la Banque de France.
- Finally, if you suspect abuse and wish to claim damages, seek legal advice. You will have to prove your loss. You should know that banks/neo-banks... are exempt from liability if they justify their decision by their obligation of vigilance imposed by the "know your customer" controls in order to fight against money laundering and the financing of terrorism.
Do not hesitate to contact us if you need information on your rights in Europe or on the amicable or judicial procedures available to you.
5 tips to avoid account blocking
- Answer correctly to the requests of a bank, insurance or any other financial provider when you open your account;
- Be sure to state the purpose of each transfer you make. Make sure that the sender of a transfer to you is also explicit.
- If the bank asks you for documents or personal information, act quickly. Beware of phishing (fraudulent e-mails with a bank's logo)! Be aware that a bank will never ask you for your bank details and password by e-mail or phone.
- If you do not understand the purpose of the request, or if you have any doubts, contact your bank. Read the general terms and conditions of the contract to find out who you can contact and what recourse is available.
- If the bank announces the closure of your account, quickly ask for the balance to be transferred to another account!
You can enter France with 10,000 € on you (cash but also any other value such as cheques, prepaid cards etc). Beyond this amount, you will have to declare these valuables to the customs.
You can declare your money:
- Online at the earliest 30 days before the date of transport of the cash and at the latest before crossing the border on the day of travel
- Or bya paper form (and 1bis Déclaration d'argent liquide UE-Feuillet supplémentaire) to the customs service, at the time of entry into or exit from French territory.