Bank of Lithuania
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The income of the electronic money institution (EMI) and payment institution (PI) sector from licensed activities in the first half of 2022 increased 1.8 times year-on-year and amounted to €375 million. The amount of payment transactions almost doubled and reached €241 billion. The amount of payment transactions grew nearly 40% over the quarter.

The revenue of 10 largest institutions from licensed activities accounted for 80% of the total sector’s revenue. According to the data for the first half of the year, more than a half of the total revenue from licensed activities, i.e. 51%, and as much as 58% of the total transactions are attributed to one EMI.

“As we observe the growth of the EMI and PI sector revenue, we seek to further increase the maturity of the sector. We are therefore also stepping up our supervisory efforts: we continuously communicate with companies in this sector, carry out different cross-cutting analyses and conduct scheduled and on-the-spot inspections,” says Dovilė Arlauskaitė, Head of the Payments Market Supervision Division at the Bank of Lithuania.

According to Arlauskaitė, the trend observed at present is that the institutions delegate part of important tasks to service providers while developing their activities. The Bank of Lithuania notes that even in such a case EMIs and PIs remain responsible for their activities and therefore must efficiently monitor and control service providers, to ensure compliance with legal requirements and provision of quality services to customers.

The financial results for Q2 2022 showed that two institutions did not meet the equity capital requirement. The Bank of Lithuania regularly reminds EMIs and PIs about the importance of the equity capital requirement, which must be always met with a margin, so it takes a strong stance in cases of detected irregularities.

In supervising this sector, the Bank of Lithuania regularly communicates with its representatives, carries out various cross-cutting analyses as well as scheduled and on-the-spot inspections. In Q2 2022, two sanctions, including a fine and a warning, were imposed on EMIs and PIs.

Having performed an analysis of the international sanction monitoring systems of financial market participants (among them EMIs and PIs), the Bank of Lithuania published examples of good practices and provided cases where the measures applied to the implementation of international sanctions should be improved.

Like every year, this autumn the Bank of Lithuania will invite representatives of the EMI and PI sector to consultation events to discuss topical issues and arising problems. At the events to be held on 25 and 27 October 2022, EMIs and PIs will be informed about the latest developments in providing payment services, and they will discuss the specifics of the organisational structure and management as well as relevant issues and challenges of reporting that companies face when opening accounts with credit institutions.

The Bank of Lithuania continues to closely monitor whether credit institutions follow the Position on the right of electronic money institutions and payment institutions to access bank accounts opened with credit institutions. During the period under review, two notifications on account closures or restrictions were received. Since 2019, the Bank of Lithuania has received a total of 57 notifications of this kind.

At the end of the first half of 2022, the public list of electronic money and payment institutions, which constitutes the basis of Lithuania’s licensed FinTech sector, included 140 institutions (88 EMIs and 52 PIs). At the request of the institutions, in the first half of the year, two licenses of payment institutions were revoked, and one new electronic money institution licence was issued.

The Bank of Lithuania publishes information on upcoming scheduled inspections of electronic money and payment institutions as well as annual and quarterly indicators of compliance with the key operational and prudential requirements for each of them.