PARIS France will step up monitoring of cash payments, withdrawals and small bank accounts to better fight against the financing of terrorism, Finance Minister Michel Sapin said on Wednesday.

Just over two months after Islamist gunmen killed 17 people in attacks against a satirical weekly and a Jewish foodstore in Paris, it is necessary to "fight against the use of cash and anonymity in the French economy", Sapin said.

The attacks did not cost the perpetrators much and were partly financed by cash, consumer loans and trafficking counterfeit goods, officials say.

"It's a terrorism that is low cost to carry out but has major impact," Sapin told a news conference. "This low-cost terrorism feeds on fraud, money laundering and petty trafficking."

From September onwards, people who live in France will not be allowed to make payments of more than 1,000 euros ($1,060) in cash, down from 3,000 now. The cap for foreign visitors, left higher for reasons that include facilitating tourism, will be cut to 10,000 euros from 15,000.

Any cash deposit or withdrawal of more than 10,000 euros over a single month will be automatically signaled to the Tracfin anti-fraud and money laundering agency.

The authorities will have to be notified over transfers of more than 10,000 euros - for instance cheques, pre-paid cards or gold - by freight within the European Union.

Someone changing more than 1,000 euros in cash into another currency will have to show an identity card, down from a previous threshold of 8,000 euros.

The government will also increase controls on pre-paid cards and add mini-bank accounts to a national banking database.

($1 = 0.9433 euros)

(Reporting by Ingrid Melander; Editing by Louise Ireland)