Retail finance in France: How does the UK market compare?

We may be separated by language, 21 miles and a body of water, but the UK and France have a lot in common. Our histories are interlinked. Our economies are as large as one another’s. Even our population sizes are neck-and-neck.

It may come as no surprise then that our shoppers share some similarities, too. Like the proportion of consumers who have interacted with retail finance – an embedding lending solution that allows consumers to spread the cost of purchases over a short period. 

Read: How are shoppers across Europe using checkout finance in 2023?

The figures are staggeringly close; only 1.5% between them (56.1% of French shoppers have used it in the last three years, while 57.7% of British consumers have).

And the top five sectors for spending with checkout finance appear to be exactly the same, too, as well as the proportion of the shoppers who would use checkout finance again.

With this information alone, you’d expect the people using it to be similar, but that’s not the case. Scratch the surface and we find differences in just about every defining characteristic. 

If you’re a retailer looking expand in Europe, you’ll want to understand where the differences begin and the similarities end. This is where Divido comes in.

Earlier this year, we asked nearly 2,000 British and 1,000 French shoppers how they interact with checkout finance. We find key demographic splits which merchants can use to support their expansion plans, to save time, money and headaches. Here are three things we learned about retail finance in France and the UK.

Read: How are shoppers using checkout finance in 2023? (UK research)

1. Roughly the same proportion of shoppers in France and the UK have used retail finance. But that’s not the full picture

We asked shoppers whether they had made a purchase using checkout finance (or ‘paaiement fractionné) in the last three years. Nearly six in ten consumers in France (56.1%) and the UK (57.7%) responded to say they had. But there are a number of differences in the people using it.

Men in France, for example, are far more likely to have used checkout finance than men in the UK, with six in ten French male shoppers have used some form of retail finance product, compared to less than half of British male consumers. Similarly, French females are much less likely than British females to have interacted with checkout finance. Just over half of female shoppers in France have used it, while two-thirds of British female shoppers have. 

Young people are the most likely to have used checkout finance in both countries. But, there’s quite a big difference in the proportion of users. Those aged between 25-34 use it the most in France and the UK. But young people in Britain are 14% more likely than their French counterparts (62.4% said ‘yes’ in France while 76.5% said ‘yes’ in the UK.

In France, just over a third of consumers aged between 55-64 have used checkout finance. But in the UK around half of people in the same age category say they have. And over 65s are far more likely not have used it in the UK where only 28.1% said they had used checkout finance in the last three years, than in France where 39.5% reported the same.

There is also a positive correlation with income and the likelihood a person has used checkout finance. The more one earns, the more likely they are to have used it. However, we find this is slightly more pronounced in France.

2. French consumers spend more

We asked shoppers in both countries how much they like to spend with checkout finance. We found that the majority of purchases in France are between €250-500 (34%), whereas British consumers prefer to spend on baskets £250 or less (40.2%) (though this is followed by £250-500 purchases (30.4%).

This may have something to do with income levels; the more you earn, the more credit you have access to. We know from our research that high earners in France are more likely to use checkout finance, so it makes sense that they would spend more using it. Similarly, low earners are more likely to use checkout finance in the UK, so it would make sense that they borrow less.

But it could also be determined by the products the shoppers are buying. In France, the majority of purchases with checkout finance are for white goods, followed by furniture and homeware, electronics, fashion and beauty, and travel. Meanwhile, fashion and beauty tops the list in the UK, closely followed by furniture and homeware, then electronics, white goods, and travel. (Interestingly, French and British consumers both spend in the same top five categories, albeit in a different order). The average white good costs more than the average fashion and beauty product, so this may be a driver.

3. Consumers in France and the UK trust checkout finance

This is a big one. Nine in ten people who were asked whether they intended to use checkout finance in the next twelve months said they would be open to using it again. It’s arguably the most interesting statistic to come out of our research.

Now, we get this number if we add the proportion of respondents who said ‘Yes – I will definitely buy at least one thing with checkout finance’ to the respondents who said ‘Maybe – I have no plans to make a large purchase, but would be open to using checkout finance again’. So this is not to say that everyone who has used checkout finance cannot live without it. But it is saying something that’s potentially just as important: consumers who have used checkout finance before trust it.

Demand for checkout finance will continue to grow as more shoppers interact with it. It’s already the fastest growing payment method worldwide, with a global market projected to be worth $90.51 billion by 2029, up from $22.86 billion in 2022. That’s a compound annual growth rate of 21.7% (for comparison, the credit card industry anticipates a CAGR of 8.7% in the same period). The more it grows, the more it sticks.

There is a gap, then, that will be closed – in time – between those who have used checkout finance and those who have not. Shoppers who use checkout finance are almost guaranteed to be open to using it again in the future. Merchants should look to implement this payment option at their checkouts if they haven’t already, to keep up with changing consumer behaviours. 

What does this mean for UK merchants looking to expand into France ?

Checkout finance is no one-size-fits-all. As we’ve seen, markets that may appear similar on the surface are nuanced, and merchants must understand the subtleties of the shoppers they are selling to to successfully launch their finance programme into new territories. 

That means patterning with a checkout finance provider with expertise in multiple markets. One that facilitates lending via a trusted network, via a single integration.