Bank of Lithuania published the Review of the Activities of Electronic Money and Payment Institutions for 2020

The main findings of this review are presented below.

• According to the data of the audited (when the audit is mandatory) financial accounts approved by the general meetings of shareholders, the corporate income from licensed activities increased 2.2 times and amounted to €142.2 million, whereas the value of payment transactions grew more than 3 times to €51.2 billion.
• Although 65 (54 in 2019) electronic money institutions (EMIs) and payment institutions (PIs) incurred a loss in the period under review, the financial results of EMIs and PIs with the provision of licensed services comprising the largest share of their activity indicated a profit of €6 million (an increase of 1.7 times), whereas the profit tax payable by these institutions amounted to €3.6 million (an increase of 1.3 times).
• The institutions have created 872 jobs in total, 739 of them in Lithuania.
• The activities of institutions were focused on payment account administration services as well as issuance of payment instruments (e.g. payment cards) and processing of incoming payments.
• The number of EMIs and PIs providing payment initiation services¹ and/or account information services² was growing.
• The number of initiated payments increased 2.7 times over the year and amounted to 6.1 million payments, whereas the number of accounts accessible to account information service providers totalled 2.2 million in the period under review.
• Payment initiation services enable merchants and consumers to take advantage of an alternative to Bank Link. In addition, consumers can make online purchases even if they do not have payment cards.
• In 2020, the Bank of Lithuania applied and continued to improve the EMI and PI riskiness assessment model, which enables the allocation of EMIs and PIs to four risk groups according to various indicators.
• In 2020, within its supervisory mandate, the Bank of Lithuania mainly focused on compliance with AML, own capital and customer funds safeguarding requirements, as well as examined whether EMIs and PIs provide services only within the scope of their licences.
• In 2021, with the constant growth of the FinTech sector’s maturity, the Bank of Lithuania is focusing on the governance and internal control of EMIs and PIs. Innovative solutions for obtaining supervisory information from EMIs and PIs will also be sought.
• At the end of 2020, 132 EMIs and PIs operated in Lithuania in total: 80 EMIs and 52 PIs (67 EMIs and 48 PIs at the end of 2019).

The Bank of Lithuania website contains the information on each EMI’s and PI’s key performance indicators for the year and each quarter as well as on their compliance with prudential requirements.

¹ Payment initiation service means a service of initiation of a payment order at the request of the payment service user with respect to a payment account held at another payment service provider. When providing these services, the payment initiation service provider does not hold consumer funds in any stage of the payment chain.

² Account information service means a service whereby consolidated online information is provided on one or more payment accounts held by a payment service user with one or more other payment service providers.

Supervision of financial market participants, Payments, Payment institutions, Electronic money institutions